NZ stocks: Market dragged lower by profit taking on weak US dollar

The New Zealand sharemarket lost ground today with overseas investors indulging in profit taking as the US dollar entered a new phase of weakness, a broker said.

At 5pm, the benchmark NZSX-50 index was down 9.99 points at 2429.07, while the NZSX-40 capital index was down 8.60 points at 2242.56.

Bellwether stock Telecom finished down 4c at 553, having accounted for 45 per cent of the $136.01 million worth of shares traded on New Zealand Exchange today.

Among the 144 stocks traded on NZX were 37 rises and 53 falls.

Macquarie Equities investment advisor Arthur Lim said despite its solid turnover, the market was dragged lower by offshore investors taking profits.

At 5am NZT today, US Federal Reserve chairman Alan Greenspan said the US currency's decline should help narrow the gaping US current account gap.

That pushed the greenback lower and, as a result, the New Zealand dollar up to US70.15c before it dipped to close at US69.70c.

"Our market has actually been a very good one for offshore investors to be in, particularly in the last two or three months if you are a US fund manager," Mr Lim told NZPA today.

He said another issue facing the market was the high kiwi's impact on the broad economy and therefore companies' profitability, "The Warehouse being the (most recent) focal point".

The Warehouse finished down 14c at 466 today, its lowest since August last year after shedding 30c in the two preceding days.

The discount retailer has just said it was being squeezed on margins and still experiencing problems with its Australian unit.

In other market news, Sky City Entertainment shares were down 14c at 446 after it yesterday confirmed it had agreed to buy Darwin's only casino for A$195 million ($220 million).

Mr Lim said brokers said investors were worried about Sky's increased debt and whether it could make the casino work as well as it has with its Adelaide casino purchase.

Shares in insurer Tower closed unchanged at 137 after its annual meeting in Wellington today.

Also today, Fletcher Forests fell 1c to 134 after reporting a December half year loss of $26 million which compared with a $4 million profit in the year ago period.

Fletcher Building was down 7c to 397 despite reporting a strong result yesterday. It expects a downturn in the property construction sector in Australia and New Zealand but said it still expects a strong full year result.

In other moves, AMP was up 14c at 500, ANZ Bank up 22c at 2015, Genesis down 7c at 85, Hellaby down 9c at 490, NZX down 17c at 688, Ports of Auckland up 10c at 770, and Westpac up 20c at 1810.

Overseas, the Dow surged 123.85 to 10,737.70, the Standard & Poor's 500 Index added 12.22 to 1157.76, and the Nasdaq Composite Index gained 14.33 to 2089.66.

- NZPA