NZ stocks: Market hits 16-month low

12.00pm

The New Zealand sharemarket was at its lowest since early October 2001 by mid-morning and market leaders continued to drift downward.

By mid-morning the NZSE-40 capital index was down 18.66 points, or 0.98 per cent, at 1884.36.

Topping light turnover of 7.44 million valued at $21.28 million was Telecom's $5.6 million worth of stocks.

Stephen Wright of ASB Securities said the market had followed weaker markets overseas and a soaring New Zealand dollar.

With the threat of war appearing closer by the day, Britain's FTSE-100 closed down 0.7 per cent, European indices were down more than 1 per cent, and stocks slumped in the United States.

Closer to home, casino operator Sky City reported a 39 per cent increase in interim net profit today to $52.8 million, while power company NGC Holdings doubled its six-month profit to $35.37 million.

Sky City gained 3c to 833, while NGC was down 2c at 145.

"Sky City was very good, better than expected ... people were picking a profit in the $40 millions ..." Mr Wright said.

Overnight the New Zealand dollar jumped to a fresh near four-year high of US56.60c on the hope of interest rate cuts in Europe, but some companies would not welcome the news.

"Any exporters -- Fletcher Forests, Carter Holt -- won't like the current exchange rate, but they will all have taken hedges over time," Mr Wright said.

Market leaders opened in negative territory and took the market further into the red by mid-morning.

Telecom opened down 5c but shed a further 5c to 430, mirroring the wider market to hit its lowest level since October 2001.

Carter Holt Harvey lost 1c to 170, Contact Energy lost 5c to 436, Fletcher Forests was down 2c at 102, Fletcher Building shed 5c to 346, and The Warehouse lost 12c to hit a 1-1/2 year low of 542.

Air New Zealand was unchanged at 53 ahead of its first half result on Thursday, while Auckland Airport which also reports that day was down 3c at 525.

Fisher & Paykel Healthcare shed 5c to 965 while Appliances lost 2c to 980, Sky TV fell 1c to 350, Tranz Rail was down 4c at 116, Baycorp Advantage lost 3c to 191, Briscoe Group was down 2c at 232 and Restaurant Brands shed 1c to 144.

Designer Textiles was up 8c at 100 after the fabric maker and marketer announced a one-for-nine share buyback at 150 per share.

Vertex fell 4c to 144, Skellmax was down 1c at 107, and Richmond was down 2c at 291 compared with PPCS' offer price of 305 per share.

There were 54 falls and 11 rises on the 113 stocks traded.

"There's a continual drift (downwards), everyone's waiting for the US. There's an inordinate amount of attention on Iraq instead of fixing the US economy," Mr Wright said.

On Wall St on Monday, the Dow Jones industrial average fell 159.87 points, or 1.99 per cent, to close at 7858.24; the Standard & Poor's 500 Index lost 15.59 points, or 1.84 per cent, to 832.58; and the Nasdaq Composite Index dropped 26.65 points, or 1.98 per cent, to 1322.37.

- NZPA