NZ stocks: Market slips after OCR decision

The sharemarket slipped on a day in which there was a tightening of monetary conditions even though the Reserve Bank of New Zealand left the official cash rate unchanged at 2.5 per cent.

The NZ dollar rose, which reduces exporters' earnings, and wholesale interest rates rose, reducing the attraction of investing in equities.

"The market is facing headwinds in the form of a higher currency and higher bond yields," said Barry Lindsay, research manager at First NZ Capital.

The benchmark NZSX-50 index closed down 31.428 points, or 1.11 per cent, at 2796.543. Turnover was worth $86.2 million. There were 33 rises and 51 falls among the 116 stocks traded.

The NZ dollar rose to US63.72c from around US63.10c yesterday and interest rate swap yields rose more than 20 basis points.

Mr Lindsay said the trade weighted index of the currency has risen about 17 per cent since March, which was material for corporate earnings.

Fisher and Paykel Healthcare fell 9c to 301, Rakon fell 8c to 154 and Fletcher Building fell 14c to 675.

Telecom fell 7c to 255, SkyTV fell 9c to 429. Fisher and Paykel Appliances fell 3c to 63 and its rights fell 2.5c to 22.5c.

Tourism Holdings fell 2c to 47 on a day statistics confirmed a weak trend in guest nights in April.

Auckland Airport fell 2c to 157. Contact Energy rose 3c to 569 and TrustPower was unchanged at 790.

Hellaby rose 5c to 85, Cavalier rose 5c to 185 and Nuplex rose 1c to 42, Mainfreight rose 5c to 420. NZOG rose 1c to 162.

Xero rose 3c to 128.

US stocks fell on Wednesday on worries that rising interest rates could put a damper on consumer and business spending, but stocks pared losses late in the session to finish off the day's lows.

Interest rate sensitive stocks, such as homebuilders and financials, were among the primary laggards.

The Dow Jones industrial average fell 24.04 points, or 0.27 per cent, to 8739.02. The Standard & Poor's 500 Index slid 3.28 points, or 0.35 per cent, to 939.15. The Nasdaq Composite Index dropped 7.05 points, or 0.38 per cent, to 1853.08.

- NZPA