Shares ease as new year rally falters

The New Zealand sharemarket eased slightly today, in keeping with a weak Australian market and reflecting lukewarm local economic news.

The benchmark NZSX-50 index closed down 13.458 points, or 0.407 per cent, at 3290.291. Turnover was worth $101.2 million, of which $30.6m was in Fletcher Building. There were 38 rises and 41 falls among the 115 stocks traded.

"The Christmas and New Year rally has petered out somewhat today," said Grant Williamson, director at Hamilton, Hindin, Greene.

The S&P 500 has risen every trading day so far in 2010.

"Markets in Australasia are taking a bit of a breather and coming under profit-taking pressure," he said.

The New Zealand Institute of Economic Research released its latest survey showing business confidence had stabilised in the December quarter, following rapid recovery earlier in the year.

While a rise in the New Zealand dollar overnight was negative for some stocks, though the currency eased back somewhat today.

Telecom eased a cent to 254 after it was admonished by the Commerce Commission for its latest Fair Trading Act breach.

The commission said it had reached a settlement with Telecom and its internet service Xtra after they admitted breaching the Act by misleading more than 130,000 broadband customers.

Contact Energy eased 2c to 632. Fletcher Building rose 3c to 839 and is seen as benefiting from the many reports of a strong property market. It is back around levels it was at in September last year.

Auckland Airport shed another 6c to 196. It fell 6c yesterday after saying it had agreed to buy a 24.55 per cent stake in North Queensland Airports for A$132.8 million ($166m).

Air NZ eased 2c to 118 but Infratil rose 1c to 170 as the market continued to react positively to the sale of its stake in Australia's Energy Developments. NZ Refining rose 11c to 380 on light volume.

The Warehouse fell 5c to 405 and Michael Hill 1c to 72. Hellaby fell 4c to 166 while Hallenstein Glasson rose 3c to 328.

SkyTV eased 4c to 513 and Port of Tauranga 5c to 710.

Transport stocks fared better, with Freightways up 4c to 344 and Mainfreight up 1c to 579.

- REUTERS reported from New York that US industrial shares lifted the Dow and the S&P 500 on Monday to new 15-month highs after China bolstered expectations the world economy would strengthen, but Nasdaq fell on profit-taking in tech stocks.

China reported record imports of some commodities and stronger-than-expected exports, boosting US companies with large international operations like construction machinery maker Caterpillar Inc.

Alcoa Inc rose 2.5 per cent in regular trading, but the Dow component reported earnings below Wall Street estimates after the closing bell, and its stock fell 4 per cent.

Alcoa was the first Dow component to announce results, unofficially launching the earnings season that will show whether profits and outlooks will be strong enough to fuel further gains in stocks.

The Dow Jones industrial average gained 45.80 points, or 0.43 per cent, to 10,663.99. The Standard & Poor's 500 Index rose 2.00 points, or 0.17 per cent, to 1146.98. The Nasdaq Composite Index fell 4.76 points, or 0.21 per cent, to 2312.41.

- NZPA