NZ stocks: Market kicks off quietly, fails to build on positive US tone

12.40 pm

The New Zealand sharemarket kicked off quietly this morning, failing to embrace Wall St's positive tone.

By 11.30am, the benchmark NZSE-40 was down by 0.68 of a point at 2068.49 on turnover of 12 million shares worth $22 million.

Wall Street shares jumped overnight as investors took heart in a government report showing consumer spending - the main engine of the nation's economy - grew at a better-than-expected clip in June.

The blue-chip Dow Jones industrial average closed up 121.09 points, or 1.16 per cent, at 10,522.81, while the technology-laden Nasdaq Composite Index ended up 9.28 points, or 0.46 per cent, at 2,027.12. The broader Standard & Poor's 500 Index edged up 6.71 points, or 0.56 per cent, to 1,211.23.

DF Mainland's Ken Allen said the local market was a bit of a "mixed bag" in terms of stock performances.

Pay-TV operator Sky TV was the talking point, adding 10c to 350 on media reports rival Telstra-Saturn had pulled out of a joint-venture with TVNZ to provide digital TV services, preferring instead a deal with Sky.

"There has been a bit of a concern about the effect the extra competition might have (on Sky), particularly with Telstra-Saturn buying up some sports coverage from overseas and expanding into Auckland and Christchurch," Mr Allen said.

"The stock has been struggling a bit because of that, but now that that competitor has been taken away, it has certainly given the stock price an initial boost.

"It seems to leave the field open for Sky TV digital," he said.

In other movements market bellwether Telecom was up 1c at 537, Fisher & Paykel added 1c to 1296, Contact Energy lost 2c to 327 and Sky City was down a cent at 1139.

Takeover target Montana added 4c to 459 while its suitor Lion Nathan was steady at 525.

The market is again alive with rumours of a Lion Nathan/Allied Domecq joint venture to manage Montana, possibly with a third party called in to broker such an arrangement.

Both parties deny a deal is imminent but say it is a possibility that may be explored.

Montana has been the subject of a fierce $1 billion takeover between Lion and Allied for much of this year.

Lion, with 43 per cent of Montana, and Allied, with 27 per cent, are locked into sharing a board table unless a clear victor to the struggle emerges.

In other news Waste Management was flat at 350 after announcing this morning it has been awarded a 15-year waste collection contract by the Hamilton City Council.

Mr Allen said it was likely to be another quiet day on the sharemarket, ahead of the June 30 balance date reporting season later this month.

"It still feels a little bit cautious here, there is no great buying coming through at the moment.

"Companies aren't saying anything because it is reporting season."

Rises outnumbered falls 30 to 29 among the 110 stocks changing hands by mid morning.

- NZPA