NZ stocks: Market drifts, index eases

12.00pm

The sharemarket continued to drift this morning, ignoring a late rally on Wall St.

The Iraqi situation and a lack of corporate news were both contributing to the light turnover of recent sessions, Macquarie Equities broker Kerry Porter said.

"We're getting near to the end of the December reporting period, so you have these hollow periods in the market."

Just after 11am, the NZSE-50 gross index retreated 7.34 points, or 0.38 per cent, to 1902.99 on $15.2 million worth of shares, a turnaround from yesterday's bounce of up to half a per cent.

The NZSE-40 capital index fell 6.03 points to 1891.29.

Price movements were small, with financial services firm Tower Group slipping a cent to 204 after telling analysts it had made a net profit after tax of $5.4 million for the three months to December -- down 78 per cent on the same period in 2001.

As usual, Telecom was the actively traded stock, dropping back 2c to 427 on $7.8 million turnover. Telecom's share price has seesawed after dropping to a near 10-year low of 411 this week, but yield players have supported the stock.

Fletcher Building weakened 7c to 363 on low volume.

"There is clear anecdotal evidence of the housing sector in Australia cooling and of course, Fletcher Building have some exposure to that through Laminex but the domestic situation here with building is very, very strong," Mr Porter said.

He also noted the market was in a profit-taking mode.

"Fletcher Building has been one of the stand-out performers and in a market where there's a little bit of a vacuum, perhaps some investors are looking to take some profits."

Other blue chips suffering the blues included Carter Holt down a cent to 175, and Contact down 1c to 439.

Positive stocks included retailer Kirkcaldies up 9c to 385, Sky City up 1c to 880, Port of Auckland up 10c to 650, and Steel & Tube up 3c to 316.

So far there have been 23 rises and 26 falls on 95 stocks traded.

On Wall St, stocks rose for the first day in three as investors nibbled at battered shares, but heightened global tensions kept gains in check.

Mixed results from major retailers such as Costco and Pepsi gave further pause for thought. Costco Wholesale Corp, the largest US discount warehouse operator, fell to their lowest level in nearly three years after it posted a 5 per cent drop in quarterly profit.

Pepsi Bottling Group Inc, the largest bottler of Pepsi drinks, also cast a cloud after it warned about its 2003 earnings.

The blue-chip Dow Jones industrial average climbed 70.73 points or 0.92 per cent, to finish at 7775.60. The broader Standard & Poor's 500 Index added 7.86 points, or 0.96 per cent, to 829.85, while the technology-laced Nasdaq Composite Index rose 6.63 points or 0.51 per cent, to 1314.40.

- NZPA