The Warehouse climbs 3c, but NZ market dips

The New Zealand sharemarket drifted lower today as Asian markets wobbled on worries that China's latest move to control its economy could reduce demand in Asia.

The weakness came even though there was a strong lead from Wall Street on Friday and the United States will be absent tonight due to the Martin Luther King public holiday.

The benchmark NZX-50 index closed down 15.587 points, or 0.463 per cent, at 3354.303. Turnover was worth $65.2 million. There were 33 rises and 38 falls among the 118 stocks traded.

The Warehouse rose 3c to 359 after hitting down speculation it may dumping its chief executive Ian Morrice, while revealing he had talked to the board last year about retiring this year. The company reiterated that previously released disappointing trading results in the two months to January 2 were indicative of trading conditions for retailers generally.

Michael Hill International fell 2c to 89 on the day a company associated with founder Michael Hill dispatched its offer to buy 5 per cent of the company at 90 cents a share.

Sam Stubbs, chief executive of Tower Investments said today that investors sided with taking on more risk at the end of last year even though weaker European economies rattled markets.

"This decision to embrace risk rather than take fright and run to the perceived safety of cash and bonds at the first sign of renewed trouble perhaps signals a sea change in market psychology and a significant decrease in risk aversion," he said.

Cavalier Carpets rose 11c to 325, Freightways rose 4c to 329 and New Zealand Oil and Gas rose 1c to 87.

The leaders were weak, with Telecom down 2c to 226, Contact Energy down 2c to 636 and Fletcher Building down 4c to 790.

Xero gained 10c to 265, having fallen during the first two weeks of January after hitting a record 316 at the end of 2010.

Charlies rose 1c to 20 and Scott Technology rose 1c to 136.

APN News fell 18c to 240 and Rakon fell 3c to 125. Auckland Airport fell 2c to 224 and Sanford fell 5c to 460. TrustPower fell 2c to 728.

In the US, stocks gained on Friday with a banks-led rally amid healthy volume after encouraging financial results from JPMorgan.

Strength in financial stocks helped offset economic reports that showed soft December retail sales and consumer sentiment dented by rising petrol prices. The market's resilience will be tested this week when a number of banks report results.

The Dow Jones industrial average added 0.5 per cent to 11,787.38, the S&P rose 0.7 per cent to 1293.24, and the Nasdaq Composite gained 0.7 per cent to 2755.30.

- NZPA