NZ stocks: Shares flat as market enters pre-Xmas lull

12:00 pm

New Zealand shares were flat this morning as the market entered its traditional pre-Christmas lull.

"It almost feels like Santa's already arrived," ABN Amro dealer Nigel Scott said.

"It is very quiet so far today. Opening volumes have been particularly light.

"The markets have maybe done their dash in Australasia pre-Christmas."

The benchmark NZSE-40 index rose just 2.55 points to 2055.11 by shortly after 11 am, on minimal turnover worth $10.56 million.

Among the leaders, Telecom was up 7c at 510 on turnover worth $2.5 million, Contact Energy was up a cent at 401, Auckland Airport was down 8c at 382 and Sky City slipped 8c to 628.

Yesterday's big mover, Fisher and Paykel Healthcare shed a further 30c to 1615 while its appliance cousin was down 9c at 951.

In all, rises lagged falls by 29 to 35 among the 108 stocks changing hands in morning trade.

On the upside, credit services darling Baycorp added 15c to 1200 on news it has stepped up its Asian presence, increasing its equity investments in Singaporean and Malaysian companies.

Restaurant Brands gained a cent to 189 after reporting an 11.8 increase in fourth quarter sales to $62.6 million. The franchise operator also said yesterday it has raised $54 million - $8 million more than expected - from the sale and leaseback of 51 of its KFC sites.

Lion Nathan was up a cent at 551 ahead of its annual meeting in Sydney this afternoon.

The trans-Tasman brewer said in a statement prepared for the meeting it expects to post double-digit earnings growth for the current year.

Mr Scott said the meeting was likely to pass fairly uneventfully.

"Lion don't try and surprise at their AGMs or anything like that. Ever since the Montana thing they have wanted to keep a pretty low profile."

In the US, stocks hurtled lower overnight, with the blue-chip Dow Jones industrial average closing below the key 10,000 level, as investors fretted Wall Street has rallied too far and cashed in gains ahead of the US Federal Reserve's last meeting of the year.

Trading lacked conviction ahead of the Fed's final policy-setting meeting of the year. The central bank is expected to cut key interest rates for the 11th time this year, bringing them to levels unseen since the early 1960s, in an attempt to jump-start the economy. The announcement will be made on Wednesday (NZT).

The technology-laced Nasdaq composite index shed 1.44 per cent of its value, or 29.14 points, to close at 1992.12, slightly below the key 2000 level. The blue-chip Dow Jones industrial average retreated 128.01 points, or 1.27 per cent, to 9921.45. The broader Standard and Poor's 500 Index finished down 18.38 points, or 1.59 per cent, at 1139.93.

- NZPA