NZ stocks: Quieter day predicted for market

12.00pm

A New Year's resurgence in the New Zealand sharemarket appeared to be tapering off this morning.

Just after 11am, the NZSE-40 capital index was down 7.56 points NZSE40 Capital Index to 1980.38 on moderate turnover worth $45.7 million.

Yesterday the benchmark index rose to a two-month high following rises in the United States as investors returned from their holiday breaks.

But today the blue-chip Dow Jones closed down 32.98 points, or 0.38 per cent, at 8,740.59, as the market pared expectations of a US$674 billion economic stimulation package.

"Certainly if you look at global markets, there was little leadership from overseas overnight, which would imply a relatively flat day here today," said Malcolm Davie, a broker with First New Zealand Capital.

Much of this morning's trading was artificially buoyed by leftover trading in Telecom from yesterday. Telecom shed 3c to 475 on $28.5 million today, possibly reflecting profit-taking on the stock's steady 21c gain since New Year's Eve.

Brokers felt the interest in Telecom, which was accompanied by similar interest in Telstra, reflected a surge in global telco stocks after the US announced competition relief for troubled telecommunications firms there.

Telecom also announced after the market closed yesterday that it had signed a $100 million, five-year contract with Air New Zealand.

Other recently favoured Top 10 stocks included Carter Holt Harvey, which slipped 2c to 180 today after a 6c rise in the last two days.

Mr Davie said yesterday's big $141 million turnover was "illusory", because it was boosted by a big corporate trade in Kiwi Income Property Trust.

Some $42.6 million of Kiwi shares changed hands yesterday but today it was down a cent to 105 in light trade.

Hawke's Bay meat processor Richmond was steady at 290 after gaining 50c yesterday on news that its South Island rival PPCS had launched a takeover bid at 305.

Among other moves, comeback stocks Tranz Rail lost 2c to 108 and Sky TV gained another 2c to 357; Fletcher Building was off 2c to 341; and Tower climbed another 2c to 223.

So far falls outnumber rises by 36 to 24 on 102 stocks traded.

On other Wall St markets, the broader Standard & Poor's 500 Index closed down 6.08 points, or 0.65 per cent, at 922.93. The technology-laced Nasdaq Composite Index was up 10.25 points, or 0.72 per cent, at 1,431.57. The Nasdaq has climbed for four straight sessions.

- NZPA