NZ sharemarket opens flat

1.00 pm

The New Zealand sharemarket was off to a slow start today, with many stocks down and volumes light.

"It's just a very quiet patch," said ABN Amro broker Nigel Scott. "You are really in the peak of the Northern Hemisphere summer period and we've had a couple of triggers, our currency's moving a little north from here."

Mr Scott said it was hard to tell just what was driving today's lethargy because volumes were so light.

Turnover at 11 am was 5.9 million, with a value of $13.09 million.

The NZSE-40 capital index was down 3.82 points, 0.18 per cent, to 2071.64, and the NZSE-10 capital index was down 2.21 points to 912.88.

After initially jumping 4c, Natural Gas Corporation returned to 103, its price at yesterday's close. It gained 11c, or 12 per cent yesterday, after announcing on Wednesday that it was cutting its losses and exiting the retail electricity market.

On Wall Street, stocks were stuck in negative territory as warnings of job cuts and falling profits in the technology sector arrested a brief burst of optimism the day before.

The Dow Jones industrial average fell 0.83 per cent or 85.94 points to 10,319.73 and the Nasdaq technology index also headed lower, falling 0.69 per cent or 13.68 points to 1970.64.

Mr Scott felt that both market leader Telecom and Australian-based telco Telsta were being influenced by Australia's fortunes. Across the Tasman, Telstra posted a new three-year low yesterday as the Australian sharemarket tumbled more than 1 per cent.

Telecom recovered from an initial dip and is riding 1c down at 522, but by late morning Telstra was down 11c to 607.

As far as upcoming news was concerned, Mr Scott felt the market was waiting for a decision on Air New Zealand next week.

Elsewhere, Sky City was flat at 114; Tower slid 6c to 524; United Networks was down 15c at 865; Warehouse fell 2c to 568; and Montana rose 5c to 455.

Standard & Poor's said this morning that it was putting British-based wine and spirits company Allied Domecq on creditwatch, signalling a downgrade from its single A-minus rating if the company successfully took over Montana.

By 11 am there had been 31 rises and 39 falls from the 110 stocks traded so far.

- NZPA