NZ stocks: Shares slink lower on quiet trade

12.00pm


The New Zealand sharemarket slunk into mildly negative territory this morning as dips by market leader Telecom and other lead stocks nullified gains by others.

At 11.30am the NZSX-50 gross index was 4.56 points or 0.19 per cent lower at 2376.02, while the NZSX-40 capital index was 2.9 points or 0.13 per cent lower at 2201.26.

Gainers matched losers at 27 apiece on 110 stocks traded. Turnover was $25.16 million.

"It's actually very quiet, we're just seeing a lack of offshore flow today," Direct Broking's Sam Macdonald said.

"There doesn't seem to be a lot of price action in any of the big caps yet. We might see a bit more action when Asia comes to the bourse but it is looking very quiet."

Although market leader Telecom was down only 2c to 514, its 28 per cent weighting on NZSX-50 means relatively small price movements in the telco's shares have a significant effect on the index. The indices are "very, very sensitive when there's such a lack of volume", Mr Macdonald said.

Contact Energy lost 3c of yesterday's gains to take it to 530 by 11.30am. The stock gained 5c yesterday on news it was increasing gas charges for Auckland consumers.

Shares in Australasian financial services giant AMP were 7c higher this morning at 655. Yesterday AMP shareholders voted to approve the demerger of AMP's troublesome UK subsidiary HHG.

Today the AFR reported AMP was facing an expected shortfall in its A$1.2 billion ($1.38 billion) rights issue. AMP shareholders were warned that poor demand for shares in the spin-off of HHG could lead to a blowout in the estimated A$2.5 billion write-down of the UK business.

"It's still very murky," Mr Macdonald said. "There is quite a strong buying case in Australia at these levels on the notion that at some point down (the) track you're going to see a bid for the Australian business.

"The risk associated with that is that investors are going to be left out to dry for some time before any takeover emerges."

Forestry investor Rubicon was up a cent at 77c. Yesterday the Court of Appeal declined to give shareholder Guinness Peat Group (GPG) leave to appeal to the Privy Council over its allegation that US hedge fund Perry Corp had warehoused Rubicon shares. GPG may yet make a direct petition to the Privy Council.

Other stocks to rise included: Air NZ up a cent to 46, Infratil up a cent at 277, Kirkcaldies up 10c to 340, PowerCo up 3c to 185, Ryman Healthcare up 2c to 217 and Software of Excellence up 13c to 128.

Stocks to fall included: BayCorp Advantage down a cent to 299, BIL International down a cent to 64, Briscoe Group down 2c to 167, Fisher and Paykel Appliances down 2c to 385, Fletcher Building down a cent at 396, TelstraClear down 3c to 555, Tranz Rail down a cent to 150, TrustPower down 10c to 590 and the Warehouse down a cent to 504.

Meanwhile, on the offshore markets yesterday, New York's Dow Jones average ended down 41.85 points to 9923.42, the Standard & Poor's 500 Index eased 9.12 points to 1060.18, and the Nasdaq Composite Index fell 40.53 points to 1908.32.

In London the FTSE 100 closed at 4379.6 points, up 19.8 points or 0.45 per cent.

Germany's DAX index ended at 3846.18 points, up 39.64 points or 1.04 per cent, and Japan's Nikkei average closed up 78.94 points at 10,124.28.

- NZPA