NZ stocks: Market slips as Contact loses traction

The New Zealand sharemarket softened today as Contact Energy shares retraced some of yesterday's strength.

The NZSX-50 gross index was off 7.455 points, or 0.318 per cent, to 2339.345 while the NZSX-40 capital index was down 3.059 points at 2229.291.

Turnover was steady at $77 million and falls outnumbered rises 48 to 42 on 148 stocks traded.

Contact Energy, which yesterday sprinted 21c ahead to a new high of 560, shed 19c to 541 on $9.7 million worth of shares.

"People are still positioning themselves in that stock," Alan Wills, of Forsyth Barr Frater Williams, said.

"That's big turnover... so there's a lot of people who are taking advantage of the high price and lightening up but on the other hand, there'll be people coming in."

Balancing Contact's fall was bellwether stock Telecom, which rose 3c to 517 on turnover worth $22 million.

The stock appeared to be coming back into favour after a rash of selling a couple of weeks ago and a swing towards defensive stocks.

Sky City Casino also recouped some of its recent losses, rising 4c to 453.

On the downside, insurer and financial services group Tower lost further ground after a disappointing result yesterday, sliding 3c to 126. Tower reported a $149 million annual loss, reinforcing concern about the time it was taking for the company to turnaround its Australian operations.

Fletcher Building lost 3c to 405, most likely due to slowing building consent figures out today.

"The sentiment is a bit against Fletcher Building against the moment," said Mr Wills. "People are thinking that the construction cycles been running for a long time... and today's figures are just confirmation for those who believe the cycle is going to peter out."

Fletcher Building has been struggling since Australian interest rates rose to take the heat out of the housing market, he said.

Elsewhere, Auckland International Airport fell 4c to 663 despite a positive annual meeting last week. Brokers said there was a feeling the stock, although solid, was fully priced for the moment.

Another result to disappoint investors was fishing company Sanford, which dropped 5c to 530. Brokers said the company's headline result was positive, a 28 per cent increase in net profit, but it was based on forex gains rather than earnings, which were down due to lower catches and fish prices.

Agricultural equipment manufacturer Skellmax Industries gained 3c to 123 as it announced its purchase of Australian rubber manufacturer Deks Industries Pty Ltd for A$4.2 million ($4.78 million).

Air New Zealand was up 2c to 47 following a report it is set for windfall gains from the soaring kiwi dollar. Some analysts expect it to reap as much as $75 million from the rising currency.

Other stocks to move included Fisher and Paykel Healthcare down 10c to 1200, Waste Management up 12c to 389, Baycorp Advantage up 8c to 288, the Warehouse off a cent to 551, Ryman Healthcare was up 7c to 213 and ANZ down 50c to 1900.

Chip maker Mr Chips was untraded on 90c after announcing it had made a tax-paid profit of $728,942 in its September half, 15 per cent lower than the same period last year.

The market was expected to remain quiet for the remainder of the week because of today's Thanksgiving holiday in the US and the following half day tomorrow, which would see US orders dry up.

In the United States, stocks edged slightly higher as buying interest ebbed before Thanksgiving holiday despite a barrage of positive economic data pointing to a recovering economy.

The Dow Jones industrial average closed up 15.63 points at 9779.57. The Standard & Poor's 500 Index edged up 4.56 points at 1058 and the Nasdaq Composite Index rose 10.27 points up at 1953.31.

- NZPA