NZ stocks: Negative sentiment swings back

The New Zealand sharemarket opened lower as negative sentiment swung back into play, with a new economic survey and nervous start to Wall Street's trading week.

The benchmark NZX-50 index slipped 24.48 points, or 0.93 per cent, to 2608.96 in the first five minutes of trading.

The New Zealand Institute of Economic Research's Quarterly Survey of Business Opinion, released as the sharemarket opened, showed business activity at its worst level since at least 1970.

The institute also predicted the economy shrunk at least as much in the first three months of 2009 as it did in the last quarter of 2008.

Fletcher Building, which lifted 30c yesterday, shed half that gain in early trading - falling 15c to $6.05.

Telecom gave up 7c of recent gains, quickly easing to $2.38.

Other falls included Mainfreight, down 7c to $4.05, Ryman 4c to $1.43, Sky City 4c to $2.81, and Fisher & Paykel Appliances 1c to 46c.

But Fisher & Paykel Healthcare gained 1c to $2.95, and the only other leading stocks to rise in the first few minutes were Infratil, up 1c to $1.48, and Sky TV, up 2c to $3.93.

Freightways was placed in a trading halt before the market opened today, as it carried out a book build and share placement to raise up to $50 million of new equity.

Freightways shares closed at $2.78 yesterday.

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Reuters reported from New York that US stocks broke a four-day winning streak on Monday after a prominent analyst revived worries over the health of banks and the potential collapse of a takeover of Sun Microsystems bruised sentiment in the technology sector.

Bank shares slipped after veteran analyst Mike Mayo, of Calyon Securities, said banks still face fallout from excessive risk-taking and warned of rising loan losses by the end of 2010. He rated a number of big and regional banks at "underperform" or "sell."

The Dow Jones industrial average fell 41.74 points, or 0.52 per cent, to 7975.85. The Standard & Poor's 500 Index lost 7.02 points, or 0.83 per cent, to 835.48. The Nasdaq Composite Index was down 15.16 points, or 0.93 per cent, at 1606.71.

- NZPA