NZ stocks: Market slumps despite Fletcher building boost

12.00pm

Strong buying in Vertex and a healthy result from Fletcher Building failed to spark the sharemarket today as it ignored a couple of positive sessions.

Just after 11am the benchmark NZSE-40 capital index was down 9.33 points to 1950.25, just under half a per cent, mirroring a negative day on Wall Street.

Turnover worth $24.5 million, half of which was dominated by market leader Telecom which fell 4c to 448.

Profit-takers swooped on Fletcher Building which announced it had more than doubled its half year net profit to $83 million.

Buoyed by the robust building markets in New Zealand and Australia, Fletcher Building's shares initially rose 3c but then edged down 2c to 365 on $1.3 million worth of shares.

"The result was actually a solid result, it actually beats consensus forecasts by about $5 million, but the stock's up 10 per cent to date so naturally you see a bit of profit taking in the stock after the recent decent run," said First NZ Capital broker James Snell.

An initial 7c rise in the Warehouse turned to a 4c fall to 599 on solid trading, and there was also high interest in investment company Guinness Peat Group, up a cent to 148 on 1 million shares.

Plastics manufacturer Vertex was not strongly traded but rose 8c to 153 after a stand in the market for 19.9 per cent of the company brought out competing bids.

Today it emerged that South Island businessman George Gould had snared 10 per cent, and Selwyn Cushing had boosted his stake to around 7.5 per cent.

"The indications are that people who have known this business in the past and know the sector are very happy to be buying the stock at these sort of levels, which gives a lot of support to the story," said Mr Snell.

He felt there could be more upside to come in the next few weeks.

Contact Energy eased 7c to 440 after touching a new high of 450 yesterday. The company has been boosted by warnings of power price rises, a solid first quarter result and a decision to upgrade its New Plymouth power station.

Other moves included INL up 3c to 323, Richmond up a cent to 293, and Sky City Entertainment up 5c to 855 after a 19c slide yesterday.

So far there have been 27 rises and 29 falls on 97 stocks traded.

Meanwhile, on Wall St, an audiotape suspected of being from Osama bin Laden reignited war jitters, and they were reinforced by a cautious outlook on the US economy from Federal Reserve chairman Alan Greenspan.

Greenspan said uncertainties created by possible war with Iraq posed "formidable barriers" to business spending and clouded the economic outlook.

The blue-chip Dow Jones industrial average fell 77 points, or 0.97 per cent, to 7,843.11. The broader Standard & Poor's 500 Index ended off 6.77 points, or 0.81 per cent, at 829.20. The tech-laced Nasdaq Composite ended off 1.22 points, or 0.09 per cent, to 1,295.46.

- NZPA