NZ stocks: Market falls 1pc with Contact Energy down heavily

12.45pm

The sharemarket dropped more than 1 per cent today with falls across the board but most pronounced in Contact Energy.

Contact dropped another 22c, or 4 per cent, to 500 today, as speculation mounted that its 51 per cent owner, Edison Mission, will make a heavily discounted placement of its stake. Falling power prices have also hurt it. It is down 6 per cent since January 26.

The benchmark NZSX-50 index was down 24.53 at 2433.19 at noon while the NZSX-40 capital index was down 22.12 points to 2247.98.

Retailer The Warehouse fell 17c yesterday and was down another 7c to 486 today after saying yesterday it was being squeezed on margins and still experiencing problems in Australia.

The company said sales in the second quarter at its New Zealand red sheds over the vital Christmas period rose 6.9 per cent on a like-for-like basis.

Telecom was down 8c to 555.

Despite a positively viewed result, Fletcher Building fell 2c to 406. Helped along by the construction boom, it posted a December half year net profit of $111 million, up 34 per cent.

The company announced an improved dividend payout of 11 cents per share and said the outlook was positive.

Sky City requested a trading halt ahead of an announcement at 2.30pm today, expected to be the purchase of the Darwin casino for around $200 million.

Turnover was worth $27 million of which $11.6 million was in Telecom.

Michael Hill yesterday soared 40c, or 8 per cent, to 548, after producing a sparkling half year net profit, particularly in Australia. It fell 3c today to 545.

Port of Lyttelton was up 1c to 168 after it announced a 25 per cent rise in half year profit to $5.5 million.

Sky City Leisure was down 6c to 119 after it said it expected movie visits to fall because of the warm weather in Auckland and other parts of the country.

No 2 stock Carter Holt Harvey continued its post result contraction, dropping 1c to 193. There is speculation it is struggling to sell its tissue division and it may float it off as a separate company.

Other moves included: Auckland Airport, down 3c to 667, Independent Newspapers, down 4c to 476, Waste Management, down 5c to 423, Infratil, down 3c to 272 and Westpac NZ, down 5c to 1770.

There were 10 rises and 48 falls among the 109 stocks traded.

The negative tone on the market here contrasted with the US, where stocks rose for the third day in four on optimism Federal Reserve Chairman Alan Greenspan will affirm investors' expectations of stronger economic growth this year when he speaks to Congress tomorrow.

- NZPA