NZ stocks: Shares follow US market lower

1.00pm

The sharemarket continued to beat a retreat this morning, following on from overseas markets where Wall St's blue chip Dow Jones closed yesterday at its low for the year on interest rate concerns.

By midday the New Zealand market's benchmark NZSX-50 gross index was 18.69 points or 0.73 per cent lower at 2558.28, while the NZSX all capital index was 6.79 points or 0.78 per cent lower at 868.40.

Turnover by 11.30am was worth $59.96 million with falls outnumbering rises 53 to 15 among 120 stocks traded.

Direct Broking's Peter Lynds, said the US market was suffering from interest rate fears. "Its obviously spread to our market and we can't really divorce from it because its happened everywhere else."

However, Mr Lynds said the local market may not weaken as much as that in the US where leading indices have fallen to their lowest levels since late last year.

"We do have perhaps better fundamentals to the extent that there is quite a bit of yield in our market already whereas overseas markets don't have as high a dividend yield.

"Also it could be argued that the balance sheets of New Zealand companies are relatively tidy."

Meanwhile he said there was little in the way of local news to move stocks.

Top stock Telecom eased 3c by 11.30am to 557.

Elsewhere across the top fifty there were very few stocks holding steady or rising.

Among the second tier stocks, Auckland International Airport was down 9c to 642, Contact Energy was down 11c to 571, Fletcher Building was down 8c to 426, Fisher & Paykel Appliances was down 2c to 452, Sky TV was down 5c to 515, and The Warehouse was down 3c to 428.

Stocks bucking the general trend lower included Nuplex up 2c to 505, and Telstra up 3c to 533.

Other stocks to move in early trade included: BayCorp Advantage down 5c to 290, Fisher & Paykel Healthcare down 10c to 1220, Guinness Peat Group down 2c to 217, Infratil down 10c to 305, NGC Holdings down 3c to 247, Oceana Gold up 5c to 90, Ports of Auckland down 5c to 730, Richmond up 20c to 290, Tower down 6c to 155, and Waste Management down 4c to 445.

On overseas markets, Wall St's Dow Jones industrial average ended down 127.32 points, or 1.26 per cent, at 9,990.02, marking the first time the Dow has closed below the 10,000 mark since December 10, last year. The broader S&P 500 Index fell 11.58 points, or 1.05 per cent, to 1,087.12, its lowest level in nearly five months. The technology-heavy Nasdaq Composite Index tumbled 21.89 points, or 1.14 per cent, to 1,896.07, its lowest close since November 21, 2003. Driving US stocks lower are fears the Federal Reserve will raise interest rates as early as June.

- NZPA