NZ stocks: Market down as Telecom's dip offsets gains elsewhere

The sharemarket retreated from recent highs for a second day today as gains by second tier stocks were offset by a further slide in market leader Telecom.

The NZSX-50 gross index eased 8.21 points or 0.33 per cent to 2493.44, while the NZSX-40 capital index dipped 7.17 points or 0.31 per cent to 2315.95.

Turnover was a hearty $115.23 million of which $47.28 million was in Telecom. There were 52 rises and 37 falls among the 146 stocks traded.

Direct Broking's Ken Allen said the day was a mixed bag, with market leader Telecom sold off again for a second day but "pretty strong" buying in second tier stocks Carter Holt Harvey and Contact Energy being the day's highlights. There was some selective buying of the small cap stocks, he added.

Telecom was down 6c to 548 after yesterday losing 9c, "but it looks to have bottomed out", he said.

Carter Holt Harvey continued to enjoy investor interest stoked by hopes of a strong sale of its tissue business and, following that, a sale of its forests and a capital return to shareholders.

The stock rose 2c to 209 today on turnover of $12.26 million.

Contact Energy which has risen on reports that electricity prices will rise substantially over the coming year continued to move up, adding 3c to 566 today.

However, Contact's rise was dwarfed by that of fellow electricity generator and retailer TrustPower which gained 24c to 692. Yesterday it rose 18c.

First NZ Capital's Barry Lindsay, said both Contact and TrustPower had been going well lately despite recent reports of healthy hydro lake inflows.

"The view is that electricity prices are headed higher and investors want to own companies with generating assets," he said.

TrustPower had been identified as a favoured stock in a popular sector.

"It's very well regarded and there's a lot of optimism of a bright future on the back of rising electricity prices."

However TrustPower is a tightly held stock with only 13 per cent of its total market cap of about $1 billion being freely traded.

Brokers say strong demand combined with scant supply tends to exaggerate share price moves higher.

Elsewhere, Mr Lindsay said the market was a bit patchy.

Market darling Fisher and Paykel Healthcare fell for a second day, losing 10c to 1220. Earlier in the week it enjoyed good gains on last Friday's news it had struck a big deal with US health provider Apria.

Mr Lindsay said today's fall might be profit taking, but he noted that major US competitor Respironics was due to issue December quarter results later today which would give an update on the state of the market where both firms operate.

Stocks to rise today included: Amp up 9c to 542, Fisher and Paykel Appliances up a cent to 386, GRD up 12c to 240, Mooring systems up 19c to 274, NZX up 10c to 610, Promina up 5c to 380, and Steel & Tube Holdings up 4c to 388.

Auckland International Airport down 2c to 681, Fletcher Building down 6c to 403, Independent Newspapers Ltd down 4c to 502, Ports of Auckland down 5c to 788, Sky TV down 10c to 530, Telstra down 3c to 567, and the Warehouse down 5c to 515.

- NZPA