NZ stocks: Natural Gas puts wind up traders

The sharemarket lost 0.6 per cent yesterday with weakness in leading stocks Natural Gas and Carter Holt Harvey.

The NZSE-40 closed down 13 points, or 0.6 per cent, at its day low of 2053 on turnover of $81 million.

"It appeared there was a portfolio of selling that come in late in the day but there were some good performances as well - Auckland Airport was up, Air NZ was stronger," one broker said.

New Zealand's largest power retailer Natural Gas slumped 8.7 per cent to a nine-year low of 95c as the market digested the news that broking firm Forsyth Barr had downgraded its recommendation on the stock to "sell."

NGC also announced after the market close that it would raise prices for small business and residential customers because of high wholesale prices which prompted the company to issue a profit warning a week ago.

NGC closed down 7c at 97c.

AIA reached a fresh closing high of $3.80, up 5c while both Air NZ's resident-only A shares and unrestricted B shares were also up 5c, at $1.15 and $1.47 respectively.

Wood products firm Carter Holt Harvey, which has a seven per cent weighting in the NZSE-40 index, had one of the more notable falls, dropping 8c to $1.76 after rising strongly in the previous two sessions.

Brokers linked the weakness to profit taking and a fall in the share price of the company's parent, US based International Paper, after it announced plans to raise $US1 billion from a sale of 20 year zero coupon bonds convertible in stock, for refinancing purposes on Thursday.

Market leader Telecom rose 6c to $5.55 on turnover of $24.7 million. * The dollar was lower against the US dollar in local trading after the market failed to fully throw-off the nervousness from false rumours of a foot and mouth disease case in New Zealand on Thursday.

"The market was obviously spooked by that silly rumour that we had," a bank dealer said.

The New Zealand dollar spent much of the session changing hands at around $US0.4170, but late weakness in the Australian dollar/US dollar dragged the New Zealand dollar from its session highs, he said.

"You don't know whether some idiot is going to make up some other rumour this weekend, so some offshore people are nervous about going long in the New Zealand dollar," a second bank dealer said.

He said he expects there will be buying support for the New Zealand dollar on dips between $US0.4130 and $US0.4150.

The recent publication of stronger-than-expected Australian data and forward indicators, combined with the publication of weaker-than-expected New Zealand data recently, has seen that cross rate weaken in recent sessions, dealers said.

As recently as May 28 the New Zealand dollar was trading at $A0.8186.

The Reserve Bank's trade-weighted measure of the New Zealand dollar against a basket of five currencies was at 49.81, down from 50.30 late Thursday.

- NZPA