NZ stocks: Market struggles to break 4-day losing streak

The sharemarket struggled in morning business today to break a four-day losing streak.

At 11.30am, the benchmark NZSX-50 index was up just 1.71 points at 2457.84, while the NZSX-40 capital index was up 3.0 points at 2276.99.

The index has lost nearly 3 per cent in the last four days since the Reserve Bank's surprising hike of the cash rate on Thursday, bringing the key indices almost back to where they started 2004.

Turnover was light at 22 million shares worth $33 million.

Topping the turnover was Tower with 9 million shares worth $12.5 million traded. It was unchanged at 132.

ABN Amro Craigs broker Matt Willis said he was unsure of the buyer. He described Tower as a good recovery stock, albeit close to valuation.

As it has for much of this year, Telecom buoyed the market, up 5c to 5663. Telecom is due to report its second quarter result on Thursday, with analysts expecting it to post an improved first half net profit of about $366 million, helped along by a $28 million profit from selling its stake in Sky TV.

In the same period last year, Telecom posted a $301 million surplus.

Mr Willis said the market was hoping the dividend would be lifted to 75 per cent of net profit after tax. He said to a large degree that had been priced into Telecom's shares and there was potential for disappointment.

There were few moves of significance in early trading.

Contact Energy continued to show weakness following the resignation of Edison Mission chief executive Tom McDaniel. He said he was too busy with restructuring Edison, which may be selling its 51 per cent Contact stake as part of a debt reduction programme.


Mr Willis said the Edison stake was clearly on the block, along with other Edison assets, and given the rise of the New Zealand dollar, Edison would be very keen to sell Contact. Institutions were selling in the hope of picking the stock up later cheaper. It was down 6c to 536.

Fletcher Building was down 2c to 387, Steel & Tube was up 4c to 400, Westpac NZ was down 10c to 1765, Fisher & Paykel Appliances was down 4c to 370, Promina was down 10c to 346, and Turners Auctions was down 5c to 470.

Sealegs shares jumped 2c, some 50 per cent, to 4c on news it has struck a deal with Dubai-based investment company Albwardy Investments to manufacture its amphibious boats.

There were 23 rises and 41 falls among the 103 stocks traded.

US stocks ended near the unchanged mark after a late sell-off erased earlier gains, as investors sold off technology shares such as Amazon.com Inc in favour of more stable blue-chip stocks.

US stocks pared those gains in the last hour of trading, with the Dow Jones industrial average ending up 11.11 points at 10,499.18. The broader Standard & Poor's 500 Index closed up 4.13 points at 1135.26. The technology-focused Nasdaq Composite Index finished down 3.00 points at 2063.15.

- NZPA