NZ stocks: Market holds ground but volumes ease

The sharemarket held its ground despite lower turnover, a possible sign that initial optimism that the Iraq war might be short is unravelling.

The NZ50 gross index was up 8.41 points, or 0.44 per cent, at 1916.44 while the NZSE-40 capital index was down 3.11 points to 1888.28 on turnover worth $62.5 million.

A complicating factor was the number of stocks going ex-dividend today including Auckland International Airport, 9.5cps; Fletcher Building, 9cps; Michael Hill International, 7cps; and Nuplex Industries, 9.5 cps. The free-float NZ50 index includes dividends while the NZSE40 strips them out.

Auckland Airport fell 8c to 518, Fletcher Building ended down 2c to 352, Michael Hill dropped 5c to 440, Nuplex was off 7c to 336. Sky City and NZ Refining lost exactly their dividend amounts of 21cps and 50cps respectively.

ABN Amro Craigs broker Nigel Scott said the New Zealand market seemed to taking a breather after last week's high volumes.

"Covering's more the call. I think a war rally is normally sustainable purchasing ... but I think at the moment most people in global terms have been sitting on the sideline, particularly in retail (investment)."

Profit-taking was expected after the US market had its best week in over 20 years last week. The Dow Jones Industrials rose 8.4 per cent, while the British market rallied a massive 17 per cent.

AMP maintained but then lost its rally of last week in response to the pick-up in the London market. It was down 23c to 802.

Telecom commanded about a third of the total turnover, was up a cent to 433, while retailer Briscoe gained 3c to 191 on solid turnover after losing 41c on Friday. The retailer disappointed the market with a slightly lower first-half profit despite posting a 35 per cent rise.

Fletcher Forests rose 2c to 103 after announcing it was splitting the company into two -- forest ownership, and processing, marketing and distribution -- and appointing two new joint chief executives.

The change is expected to reduce the capital employed in its forests by channelling external investment into its forest estates with a consequent return to investors of surplus capital.

With discussion about rising power prices high, energy stocks were in the limelight, including Contact Energy, up 2c to 447, and NGC up 6c to 148.

Mr Scott said NGC's major stakeholder, AGL, had missed out to New Zealand state-owned Meridan Energy on the purchase of Australian company Southern Hydro, and speculation was rising as to what the company would do with the extra money.

AGL also owns about a fifth of Trustpower, which was down 5c to 400.

There were 56 rises and 36 falls among the 129 stocks traded.

On Wall St, the Dow Jones industrials jumped 235.02 points on Friday to 8,521.62, or 2.84 per cent. Its 8.36 per cent rise for the week was the best since October 1982.

The Standard and Poor's 500 index rose 20.05 points, or 2.29 per cent, to 895.89. The tech-laced Nasdaq Composite Index added 18.40 points, or 1.31 per cent, at 1,421.17.

- NZPA