NZ stocks: Shares ease on lacklustre offshore session

12.00pm

The New Zealand sharemarket eased slightly this morning following a lacklustre night offshore.

The NZ50 gross index was 8.59 points lower at 2004.73 shortly before midday, while the NZSE-40 capital index lost 5.08 points to 1980.34.

Volumes were light with just under 13 million shares worth $26 million changing hands.

ABN Amro Craigs retail equities adviser Nigel Scott said the market appeared to be in consolidation mode after clocking up a 2 per cent gain in the last two sessions.

Contact Energy eased 7c to 428 after reporting a $34 million net profit for the six months to March 31, up from $30.1 million a year ago, but at the bottom end of the $33 million-$47 million forecast range.

"It's one of the key stocks out there and clearly it is key that (the second quarter result) was one of the lower quarters for them," Mr Scott said.

Contact also revealed it had been hit by the high wholesale power prices.

"Although retail electricity sales increased by 40 per cent, net retail revenue was 36 per cent lower because of the much higher cost of purchases from the wholesale market to cover our retail load," chief executive Steve Barrett said.

The average price paid by Contact for retail purchases was $76.18/MWh -- 94 per cent more than the $39.23 MWh paid in the corresponding period last year.

Contact's overall level of hedging in volume terms increased to about 100 per cent, from 76 per cent in the same period last year, but Mr Scott said this was not too much of a concerning in terms of exposing Contact to the volatile wholesale market.

"They're probably hedged at good prices. You can never predict spot prices," he said.

In other news financial services group AMP Ltd said it planned to split into two main divisions along geographic lines and would book writedowns of around A$2.6 billion ($2.88 billion).

It also announced plans for a A$1.0 billion placement to institutions, priced at up to A$6.50 share.

"The bookbuild range is A$4.50 to A$6.50," chief executive Andrew Mohl told reporters.

Bookbuild refers to the sale process to investors, where offers are taken within the range before a final price is set.

Shares in AMP were suspended ahead of the announcements. They last traded yesterday at $9.80.

In other moves, Telecom eased back 2c to 477 after its recent good run; Briscoe Group dropped a cent to 193; Carter Holt Harvey was flat at 163; Fletcher Building was 5c lower at 330 -- despite figures out today showing unadjusted building consents reached a 26 year high in March; Fisher and Paykel Healthcare was 4c lower at 1071; sister stock Appliances added 5c to 1075; Independent Newspapers dropped 5c to 409; Sky TV was 3c lower at 402; The Warehouse was 2c down at 558; and Sky City was off a cent at 829.

Falls narrowly outnumbered rises by 28 to 27 among the 106 stocks traded so far.

In the United States, stocks finished fractionally lower in a lacklustre session on Wednesday, as investors weighed weak US manufacturing data against cautious optimism about the economy from the nation's top central banker.

But the three major stock gauges posted their biggest monthly gains since the fourth quarter of 2002.

The Dow Jones industrial average finished down 22.90 points at 8480.09. The broader Standard & Poor's 500 Index slipped 0.92 of a point to 916.92 and the Nasdaq Composite Index ended down 6.99 points at 1464.31.

For April, the Dow has climbed 6.1 per cent and the S&P 500 added 8.1 per cent, their biggest monthly gains since October 2002, while the Nasdaq jumped 9.2 per cent, its biggest monthly gain since November 2002.

- NZPA