NZ stocks: Shares slip into red as war threat looms

New Zealand stocks sank into the red today on lacklustre volume as investors adopted a cautious approach ahead of a possible United States-led war on Iraq.

The new benchmark NZ50 gross index closed down 5.66 points at 1901.86, while the NZSE40 capital index eased 5.14 points to 1884.13.

Market turnover totalled just $68 million.

"The market is pricing in what is happening overseas and investors are going for a cautious, wait-and-see approach," ABN Amro Craigs retail equities adviser Nigel Scott said.

"It's lacking in order flow, but there's not aggressive selling either."

On Wall St, stocks tumbled on Monday as a March 17 deadline set last week by the US and Britain for Iraqi President Saddam Hussein to comply with United Nations disarmament demands loomed. France and Russia have said they would vote against the deadline.

The Dow Jones industrial average slipped closer to multi-year lows set on October 9, when the benchmark gauge closed at 7286.27.

The Dow closed down 171.85 points, or 2.27 per cent, at 7568, while the technology-laced Nasdaq was down 26.92 points, or 2.06 per cent, at 1278.

Among the top stocks here, Auckland Airport ended down 4c at 530, Fisher and Paykel Appliances dropped 5c to 955, Fletcher Building shed 3c to 358, Carter Holt Harvey was flat at 173, Sky City lost 3c to 865, and Telecom dropped a cent to 436.

Shares in Australasian life insurer and fund manager AMP Ltd carved out a fresh record low as investors ignored its attempt to ease fears about the group's exposure to the ailing British equity market.

They closed down 25c at $6.60, compared with a year high of $23.70 before the troubles with its British life insurance unit began.

Falls outnumbered rises by 60 to 27 among the 119 stocks traded.

On the upside, INL rose 2c to 322, Ports of Auckland added 5c to 621, Contact Energy climbed 2c to 446, Lion Nathan was up 5c to 563 and Baycorp Advantage added 3c to 127c.

Discount retailer The Warehouse jumped 6c to 558 after announcing yesterday its January half year profit rose 7.2 per cent to $63.5 million before a $7.5 million one-off charge lowered the bottom line to $58.2 million.

While the double digit growth of past years has evaporated, the result was in line with guidance and expectations.

The stock was aided by official data out today showing retail sales rose 1.1 per cent in January on a seasonally adjusted basis, compared with a 0.5 per cent rise in December.

The Statistics New Zealand figures were better than expectations of a 0.4 per cent rise and confirmed the strong trend of domestic spending over the last year.

Fellow retailer Briscoe Group rose 3c to 240, while Michael Hill Jeweller shed 10c to 445 after The Warehouse indicated yesterday it was keen to increase its slice of the under-$1000 jewellery market.

Food company Goodman Fielder was a cent higher at 175 after Burns Philp raised its stake in the company to 51.79 per cent and said it had extended the deadline to resolve a crucial board representation issue until March 14.

Burns Philp - controlled by New Zealand's richest man, Graeme Hart, - is in the process of a $A1.9 billion ($NZ2.1 billion) hostile takeover of Goodman . Winning board control would allow it to make its bid unconditional.

- NZPA