NZ stocks: Electricity shares take hit on intervention scare

12pm

Energy stocks rather than war became the focus of the New Zealand sharemarket this morning, as the Government signalled possible state intervention in the electricity sector.

Offshore, reports an uprising may have started in the southern Iraqi city of Basra cheered US markets, with the Dow Jones industrial index ending up 0.8 percent.

But in New Zealand, the wider market was virtually flat with energy stocks taking a pummelling from the new uncertainty.

Prime Minister Helen Clark said on Monday the Government was contemplating unspecified change to the electricity sector and Energy Minister Pete Hodgson said one option was a single body to buy and sell all generated electricity.

Contact Energy, the country's largest listed power company, was down 10c to 435, after the likelihood of higher power prices helped the stock to a year high of $4.62 in mid-February.

Hydro power generator Trustpower fell 15c to 385, off its February year high of $4.10, which was also driven by power price optimism and news of a two-for-seven share buyback offer.

Whakatane-based lines company Horizon Energy plunged 30c to 270 but on thin trading.

Just after 11am the benchmark NZ50 gross index was up 1.91 points to 1907.32 on turnover worth $22.6 million. The NZSE-40 capital index was up 0.32 points to 1878.36.

Gas distributor NGC Holdings was up 4c to 144 after losing 8c yesterday after a partial selldown of Hutt Mana Energy Trust's 9.8 percent stake.

Designer Textiles was flat at 95c despite a crossing of more than 740,000 shares following yesterday's announcement that its chairman, George Gould, had become chairman of Vertex.

Brokers said investors would be hoping the man who helped turn around Designer Textiles could spin his magic on the plastics manufacturer as well.

Market leader Telecom was up 4c to 437 on light turnover. Grant Williamson, a partner with Hamilton, Hindin, Greene, said the stock had been largely moving on order flows and appeared to have found its level in the $4.20 range.

Other leaders included Fletcher Building down 3c to 345, Carter Holt Harvey flat at 173, and Fletcher Forest ordinary shares up a cent to 104.

Recent retail darling Briscoe Group reclaimed 2c to 188, after being punished by the market for a slightly lower first half result last week.

Retailers and investors were starting to worry about tougher trading as a result of drought and weaker export returns in the rural regions, brokers said.

Falls outnumbered rises by 28 to 25 on 94 stocks traded.

On Wall St, the blue-chip Dow Jones industrials ended up 65.55 points, or 0.80 percent, at 8280.23, after jumping almost 1.5 percent earlier. The tech-laced Nasdaq Composite was up 21.23 points, or 1.55 percent, at 1391.01, after an earlier rise of more than 2.2 percent. The broad Standard and Poor's 500 added 10.51 points, or 1.22 percent, to 874.74.

- NZPA