NZ stocks: Sharemarket begins August with a whimper

12.00pm

The New Zealand sharemarket opened fairly flat today, mirroring the mixed performances of northern hemisphere markets overnight.

By mid-morning the NZSE-40 capital index was up 9.43 points, or 0.47 per cent, at 1995.39, while the top-10 index was up 0.73 per cent at 879.08.

Most of the turnover, of 8.38 million stocks valued at $25.41 million, was in pre-market trade.

Telecom topped turnover with 2.37 million stocks worth $11.24 million.

"It was very quiet indeed," Andrew Kelleher of ASB Securities said.

"If you strip out pre-open trades we've barely even registered this morning in terms of activity. Turnover was almost all crosses in Telecom and Lion Nathan," Mr Kelleher said.

By mid-morning Telecom was up 8c at 479.

"Bit of a mixed bag (offshore), but nothing too dramatic. It's a new month, hopefully a little bit more stable. I still think we're going to see markets trade sideways for another couple of days yet as they digest the big moves we saw at the end of July.


"I think you've got to ask if those couple of big up days that we had, was that fresh money buying or was it just a reallocation of (positions) from the big money accounts offshore?

"You can't discount the probability of another big down move, but the probability of that has lessened now."

Contact Energy was up 2c at 382 after its announcement of a 7 per cent decrease in nine-month net profit to $70.41 million.

That was down compared with last year's $76.0 million surplus for the same period last year, during a period when wholesale "spot" market prices were rising to reflect dry hydro conditions.

Air New Zealand was unchanged at 65c after it revealed details of cheaper fares yesterday as part of its restructuring programme.

The cheapest fares, some slashed by up to 50 per cent, are only available over the internet.

"(Chief executive) Ralph Norris was the champion of internet technology when he was at ASB Bank, and there's a couple of things they're doing at Air NZ - trying to take some of the travel agents out of the loop, and taking reservations online - using that internet technology to lower the costs.

"They've still got challenging times ahead, but he does appear to be taking the airline in a new direction," Mr Kelleher said.

Elsewhere on the market, Baycorp Advantage lost 5c to 415, retailer Briscoe Group was down 3c at 232, Tranz Rail shed 5c to 205, Sky City casino lost 2c to 623, Fletcher Forests was down 1c at 22, and shareholder Rubicon was down 1c at 71.

The Warehouse was up 4c at 707, UnitedNetworks gained 9c to 919 following its announcement of interim profit rising 20 per cent to $64.2 million, Carter Holt Harvey was up 1c at 185, Fisher & Paykel Healthcare rose 5c to 835, Fletcher Building gained 2c to 271, and financial services company Tower was up 13c at 418.

Rises outnumbered falls 25 to 22 on the 90 stocks traded.

On Wall St, the broad market staged a late-day rebound on Wednesday as professional investors dressed up portfolios at the end of a brutal July, but a weak reading on economic growth and a grim outlook from chip maker Nvidia kept up the pressure on technology shares.

The Dow closed up 56.56 points, or 0.65 per cent, at 8736.59; the broader Standard & Poor's 500 Index finished up 8.84 points, or 0.98 per cent, at 911.62; and the technology-laced Nasdaq Composite Index dropped 15.92 points, or 1.18 per cent, to 1328.27.

- NZPA