NZ stocks: Market fades after strong start

The sharemarket started strongly and then faded as investors took profits in leading shares.

The benchmark NZSX-50 index closed down 43.916 points, or 1.529 per cent, at 2829.223, having risen 45 points within an hour.

Turnover was worth $83.5 million. There were 38 rises and 36 falls among the 119 stocks traded.

Telecom fell 11c, or 3.68 per cent, to 261, Fletcher Building fell 17c to 685, and Sky City fell 10c to 294. Contact Energy fell 2.89 per cent to 605.

"Initially, going on from Friday night, US and European markets were very strong. It just started tracking down with Australia," said Stephen Wright of ASB Securities.

"Over there, there are still a lot of cash hungry companies, with some profit-taking obviously, starting to get into Telecom and Sky and things like that. "

Mr Wright said the drop in Telecom stocks was "quite noticeable" - after opening at 277, Telecom peaked at 278, then dropped.

Hamilton, Hindin, Greene director Grant Williamson said the reversal on the market did not bode well for tomorrow's trading.

The strengthening New Zealand dollar could seriously affect New Zealand-listed exporters, Mr Williamson said.

Postie Plus rose 6c to 36 after posting a 7.3 per cent lift in third-quarter sales to $25.4 million.

NZX rose 46c to 820 after announcing an Australian takeover on Friday. Xero rose 15c to 145 after announcing a reseller deal with British Telecom.

TrustPower rise 5c to 755, Sanford rose 5c to 575 and Rakon rose 7c 163.

Freightways fell 5c to 307, Lion Nathan fell 25c to 1465 and Ebos fell 10c to 490. SkyTV fell 10c to 440.

In the United States stocks rose on Friday (local time), with the Nasdaq capping its longest stretch of weekly gains in a decade, as stress test results and reassuring jobs data fuelled hopes the worst is over for banks and the economy.

Financial shares led a broad run-up again, a day after regulators said most US banks were sound.

The Dow Jones industrial average gained 2 per cent to 8574.65, the Standard & Poor's 500 Index rose 2.4 per cent to 929.23, and the Nasdaq Composite Index climbed 1.3 per cent to 1739.

- NZPA