NZ market posts sixth decline in seven days

There was a lot going on today for sharemarket investors to absorb in terms of the economic agenda in New Zealand and they generally adopted a wait and see attitude to it.

Shortly after news broke that inflation in the December quarter was lower than expected, a report calling on the Government to cut company and income taxes and raise GST and taxes on assets was released.

Also, news broke of curbs to bank lending in China, which knocked sharemarkets lower in Asia. The NZ dollar fell about a US cent, helping companies which export.

"It's another sign the Chinese economy is running at full steam. Obviously attempts to slow it will be met by short term weakness but in the long run, this should be seen as a positive as it helps prevent the economy from overheating and asset bubbles from forming," said Ben Potter, research analyst at IG Markets.

The benchmark NZX-50 index closed down 0.342 points, or 0.011 per cent, at 3227.25, after losing 19.5 points yesterday, its sixth decline in the past seven trading days. There were 39 rises and 35 falls among the 115 stocks traded.

Business groups welcomed a tax working group report suggesting company tax be cut but rejected a proposal for a land tax. Investors are now waiting to see if the Government runs with a comprehensive revamp of the New Zealand tax system in this year's budget.

Otherwise, investors continue to be cautious ahead of the local corporate reporting season in February.

Fletcher Building fell 4c to 803, having fallen 24c in the past two days, while Telecom rose 1c to 246 on top of yesterday's 7c decline, and Contact Energy rose 3c to 609.

Auckland Airport was unchanged at 190, while Tower rose 1c to 206 and NZX rose 1c to 229.

Nuplex was unchanged at 306 as was SkyCity on 331 and Freightways rose 2c to 346.

Methven eased 2c to 176 and The Warehouse eased 9c to 379. Tourism Holdings eased 6c to 95 and ING Property eased 2c to 77.

In the United States, the Dow Jones industrial average and the Standard & Poor's 500 index rose to fresh 15-month closing highs as investors bet a potential Republican victory in Massachusetts' Senate race could stall President Barack Obama's reform agenda.

The Dow was up 1.1 per cent to end at 10,725.43, the S&P 500 up 1.25 per cent to 1150.23, and the Nasdaq Composite Index up 1.4 per cent to 2320.40.

- NZPA