NZ stocks: Fisher & Paykel stars but market ends flat

The sharemarket ceded early gains to close flat yesterday, despite a strong lead from Wall Street.

The benchmark NZSE-40 index closed down 2.76 points, or 0.12 per cent, at 2043.46.

"The market in the last few days just hasn't had the follow-through in the latter part of the day," JBWere senior investment adviser Peter Stokes said.

"Given Wall Street's performance, one would have thought that we would at least end in positive territory but we just gave that away towards the end of the day."

Market barometer Telecom was again the culprit, weighing down an otherwise positive market with a 5c fall to $5.18.

Telecom makes up around 23 per cent of the top 40 index, giving it considerable might to sway the whole index.

Turnover was a moderate 30 million stocks worth $85.7 million - $14 million of that in Telecom and $32 million in whiteware manufacturer Fisher & Paykel.

A star performer of late, Fisher & Paykel added 25c to $13.20 - a fresh closing high - in anticipation of the split of its whiteware and highly profitable healthcare divisions.

The stock is now up 66 per cent since the start of the year, compared with an 8 per cent gain for the NZSE-40.

In the wider market, rises outnumbered falls by 63 to 36 among the 138 stocks traded.

Among the positive movements, Auckland Airport added 5c to $3.52, Sky City rose 15c to $11.90, Frucor was up 4c at $1.69, Nufarm added 13c to $3.81, The Warehouse was up 7c at $5.37, Tranz Rail climbed 5c to $4.05 and the Port of Tauranga was up 4c at $6.75.

On the downside, rival operator Ports of Auckland tumbled 19c to $5.18, Telstra slipped 18c to $6.65, Carter Holt Harvey shed 1c to $1.70, Baycorp lost 20c to $12.80 and takeover target Montana was down 3c at $4.50.

Air New Zealand A and B shares each added 1c to $1.09 and $1.45 respectively ahead of a press conference on the airline's future ownership.

Mr Stokes said the market was still suffering from a lack of news-driven direction.

"The market is actually starved of corporate news at the moment - that goes some way to explain the patchy mixed-type market."

The NZSE-40 has been stuck in a range between 2000 and 2100 for the past two months after climbing off a low around 1900 at the beginning of the year.

In contrast, US stocks have been volatile during the period, bouncing between positive and negative territory.

Overnight they racked up their biggest gains in more than two months after technology bellwethers Microsoft and Motorola infused Wall Street with hope that corporate profits may be near a rebound.

* The New Zealand dollar ended slightly higher yesterday in line with its Australian counterpart, but dealers warn the risks are firmly on the downside.

At 5 pm, the kiwi was at 40.65USc, against 40.44c at Thursday's close, having been locked in a narrow 4-point range for most of the afternoon.

The kiwi was pushed up in the morning by rumours the Australian Reserve Bank had entered the market to prop up the Australian currency, but remained trapped at that level, one currency dealer said.

"We haven't really gone anywhere this afternoon. We have probably traded about a four-point range."

Jon Clarke, a director at Greenwich Financial Services, said the Reserve Bank of Australia was supporting a shaky aussie around the 50USc level.

Given the close correlation between the transtasman currencies, that provides de facto insurance for the kiwi.

However, Mr Clarke said the kiwi was vulnerable below 40USc.

"If we break 40c that would look very negative for the second half of the year," he said, noting the exporting season was over.

Australian traders are also wary of the aussie repeating its meltdown early this year which ended with the unit setting an all-time low of 47.75USc on April 2.

The Australian unit closed locally at 50.64USc.

- NZPA