NZ stocks: Market ends string of gains as Telecom takes a breather

The New Zealand sharemarket ended a string of recent gains today as moves higher by a number of lead stocks including Telecom ran out of steam.

The benchmark NZSX-50 gross index finished 7.54 points or 0.3 per cent lower at 2501.65, while the NZSX-40 capital index ended 6.75 points or 0.29 per cent lower at 2323.11.

Turnover was $94.66 million with 62 rises and 46 falls among 150 stocks traded.

Maquarie Equities' Kerry Porter said the market's drift lower was not surprising after its gains during previous sessions.

"Markets inhale and they exhale, all we're seeing at the moment is a little bit of exhaling," he said.

"Stocks or any asset class just can't keep on moving a single direction forever.

"There's nothing fundamentally changed with the market the fundamentals still remain positive.

Market leader Telecom lost 9c to 554 after yesterday pushing to its highest level in more than a year.

However Mr Porter didn't attach too much importance to the telco's dip, saying it pointed to a distinctive feature of the New Zealand market where fluctuations in order flows could produce exaggerated swings in share prices.

"On the day that's simply dynamics. Call it profit taking -- what you will -- there were more sellers than buyers."

He said the stock still remained undervalued relative to the broader market.

Mr Porter said a number of other leading stocks that had accompanied Telecom higher in recent sessions followed it lower today. The Warehouse for example was down 8c to 520.

"What we're seeing at the moment is some of the leaders having a bit of a breather and the quality second liners where perhaps a degree of perceived value exists are being quite keenly sought.

However other top stocks continued to rise.

Carter Holt Harvey gained 3c to 207. The stock has risen over the past few days on speculation the company may sell its forest estates.

Contact Energy rose 3c to 563 on reports electricity prices will continue to rise over 2004.

Infrastructure investor Infratil was up 5c to 286. The company today said domestic and international traffic through its key Wellington Airport investment were up strongly in December.

Meanwhile, investors appeared to be over Fisher and Paykel Healthcare's announcement last week of a US$60 million ($91.29 million) contract with United States company Apria Healthcare Group.

Today the stock was down 15c to 1230 ending its run up since the announcement. Sister stock Fisher and Paykel Appliances which benefited from Healthcare's rises by virtue of its holding in the company, continued to rise today, adding 2c to 385.

Fletcher Challenge Forests was up a cent to 141. The company today announced a management cull as part of plans to cut overheads by up to $13 million, as it sells its forests and re-focuses on wood processing.

Energy generator and retailer Trustpower leapt 18c to 668. However, Mr Porter said the stock's move higher was on fairly thin volume.

One of the few pieces of corporate news out today was Ports of Auckland's announcement that its December container volumes were up on the same month the previous year. The stock rose 7c to 793 on the news.

Port of Tauranga was also up, rising 6c to 461.

Other stocks to rise included:

Guinness Peat Group Ltd up 2c to 188, Hellaby Holdings up 5c to 509, and Independent Newspapers Ltd up 3c to 506.

Stocks to fall today included: AMP down 11c to 533, Auckland International Airport down 3c to 683, BayCorp Advantage down 3c to 325, Mooring Systems down 25c to 255, Postie Plus down 3c to 105, Restaurant Brands down 3c to 120, Sky City down 3c to 462, Sky TV down 10c to 540, and Waste Management down 5c to 420.

- NZPA