NZ stocks: Market totters along after OCR announcement

12.00pm

The sharemarket tottered along this morning with the Reserve Bank's (RB) decision to keep the official cash rate (OCR) at 5.0 per cent having little effect on trading, a broker said.

At 11.30am, the benchmark NZSX-50 was up 4.14 points at 2366.14, while the NZSX-40 capital index was up 3.13 points at 2210.85.

There was $23.9 million worth of shares traded on volume of 9.4 million. Among the 119 stocks traded were 51 rises and 17 falls.

Market heavyweight Telecom was unchanged at 512, having traded $5.9 million worth on volume of 1.1 million.

ASB Securities broker Stephen Wright said the market had traded on moderate volume this morning.

There were strong arguments on whether the OCR should have been left at 5.0 per cent or raised 25 basis points, he said.

"But overall I think it (keeping the OCR at 5.0 per cent) has been reasonably well received by the market," Mr Wright told NZPA today.

RB governor Alan Bollard's choice was between trying to dampen the booming domestic economy, and the housing market in particular, or help the export sector, which is hard-pressed by the soaring exchange rate.

Last night the New Zealand dollar surged above the US65c mark, but had dropped back to US64.90 at the start of the domestic session today.

It shed a further quarter of a cent when Dr Bollard made his monetary policy statement this morning.

However, he clearly signalled that an OCR rise was on the cards in the New Year.

Mr Wright said the OCR announcement had so far had little effect on trading.

"Lots of stocks started off quite strongly but have just drifted off their highs and market is still a touch up."

Among those stocks was the weather-beaten The Warehouse Group, its shares down 4c at 508 after earlier being up 8c at 520.

The discount retailer's shares have been traded down from 551 late last week when it confirmed its Australian unit was unlikely to perform up to expectations.

Macquarie Equities NZ broker Arthur Lim said Dr Bollard's move was an encouraging one for the economy and should have a positive influence on the market later in the session.

Mr Lim told NZPA that Dr Bollard's move showed "a much more pragmatic approach towards monetary policy settings, which augers well for New Zealand really."

Also today, retailer Harvey Norman delists from the New Zealand Exchange at the end of business today.

Shares on the rise included: ANZ Bank up 19c at 1940, Baycorp Advantage up 6c at 295, Contact Energy up 5c at 551, Fisher & Paykel Appliances up 4c at 389, F&P Healthcare up 12c at 1200, Hellaby up 4c at 500, Owens up 4c at 109, Postie Plus up 2c at 108, and Westpac up 10c at 1670.

Among those on the slide were: AMP Office down 1c at 78, Auckland International Airport down 1c at 664, Hallenstein Glassons down 2c at 299, Lion Nathan down 2c at 660, and Tourism Holdings down 1c at 144.

There was $14,745 worth of shares traded on the New Zealand Alternative Exchange this morning.

Overseas, the Dow Jones was up 81 points 9935, the Standard & Poor's 500 Index was up seven points at 1073, while the Nasdaq Composite Index was up 15 points at 1995.

- NZPA