NZ stocks: Market slump continues after US rate cut

The sharemarket continued to pull back from its recent gains this morning taking its cue from US markets' disappointment with the US Federal Reserves 25 basis point rate cut last night.

B y 11.30am the NZSX50 gross index was down 5.23 points or 0.24 per cent to 2164.61, while the NZSX 40 capital index fell 7.21 points or 0.34 per cent to 2101.36. Turnover was $39.97 million on 14 million shares traded.

"The Fed cut interest rates by a quarter point last night but the Dow was a little weaker and we're expecting just a little bit of weakness this morning," a JB Were broker told NZPA.

In the US stocks gave up some gains yesterday and blue chips turned negative as the market was disappointed by the Federal Reserve's decision to cut interest rates by only a quarter of a percentage point and rattled by the Fed's warning of possible deflation.

However, the broker downplayed the effect of the rate cut on the local market saying its "fairly quiet start" this morning was part of the general trend at the moment.

"I just think its a pull back from what was very large run over the last three months in world equity markets."

Telecom led the market down this morning falling 2c to 515 by 11.30am.

Independent Newspapers Ltd, which this morning said it was still mulling over what it will do with the proceeds of the $1.2 billion sale of its newspapers to John Fairfax Holdings Ltd, was the second most traded stock this morning after Telecom.

INL shares were unchanged on 420 this morning.

Among the stocks to move in early trade by 11.30am were:

Air NZ down 2c to 52, AMP up 5c to 575, Auckland International Airport down 2c to 595, BayCorp Advantage up 2c to 160, Carter Holt Harvey down a cent to 170, Dorchester Pacific down 3c to 170, Fisher & Paykel Appliances up 5c to 1290, Fisher & Paykel Healthcare up 5c to 1170, Guinness Peat Group up a cent to 155, Lion Nathan down 5c to 625, Mainfreight up a cent to 133, Promina up 2c to 268, Richina down 5c to 30, Sanford down 4c to 496, Sky City down 2c to 938, Sky TV down 2c to 440, Software of Excellence up 4c to 142, Steel & Tube down 4c to 357, Telstra up 2c to 503, Tourism Holdings Ltd up 2c to 113, Tower Group down 2c to 144, and the Warehouse down 2c to 510.

There were 28 rises and 29 falls among 105 stocks traded.

- NZPA