NZ stocks: Nervous investors stick to sidelines

The sharemarket headed down yesterday on volumes described as "pathetic".

Total turnover was worth only $36 million, and the barometer NZSE-40 capital index fell three quarters of a per cent, or 14.42 points, to 1874.65. The top 10 index fell 8.34 points to 811.67 and the small stocks index gained 1.17 points to 5194.11.

"The market is suffering from an acute lack of interest," said Forsyth Barr Frater Williams executive director Don Turkington.

Investors have been further unsettled by hostilities in Afghanistan.

"People are settling in to see where it goes. I think President (George W.) Bush has put the correct spin on it - it's something that will carry on for some time, it's not a Gulf War situation," said ASB Securities broker Andrew Kelleher.

The market was led down by Telecom which fell 8c to $4.37.

Air New Zealand A shares fell another 10 per cent, or 3c, to 30c to meet the B shares, which held steady. The speculative smallholder activity appeared to have dried up yesterday but selling pressure is tipped to resume today following chief executive Gary Toomey's resignation announcement after the market close.

Dr Turkington said Mr Toomey's resignation would add to the airline's uncertainty.

"It's not so much that Toomey is leaving but that there is no real replacement for him at this stage," he said.

Recently appointed director Roger France will act as a stop-gap CEO.

"They haven't shown a lot of airline management depth through this crisis and at least Toomey was an experienced airline person," Dr Turkington said.

Mr France was one of the new directors appointed last week, and was formerly at PriceWaterhouseCoopers.

"It's surprising that they couldn't keep Toomey until they could find a replacement."

Dr Turkington said that with the shooting having started in Afghanistan, the already ugly environment for aviation stocks had deteriorated further.

Auckland Airport fell 7c to $3.35 in response to Air New Zealand's announcement of key route cutbacks. Transtasman traffic is expected to be severely affected.

Fund managers took a hit yesterday with AMP down 75c at $21.90, Tower down 9c to $4.86 and Axa down 6c to $3.06.

However, among the general dross there were some pearls. Energy companyHorizon rose 89c to $13.00 on light volume.

There was heavy trading again in Fletcher Building with broker UBS Warburg still sitting on the buy button for a client. It rose 1c to $2.71 on 1.7 million shares worth $4.5 million.

Contact Energy traded up to $3.45 but closed square on $3.41.

Other defensive stocks such as DB Group, up 8c to $5.10, and Lion Nathan, up 9c to $5.64, performed well.

Fisher & Paykel investors celebrated shareholder agreement on Monday to split the stock and shrugged off suggestions the Nasdaq listing of its healthcare division could be delayed. It closed up 11c at $13.46.

However, most stocks suffered. Among those to lose were: Cavalier, down 24c to $5.20, INL, 7c to $3.23, Metlifecare, 10c to $1.05, Sanford, 10c to $6.20, Sky City, 13c to $11.02, and The Warehouse, 8c to $5.96.

- NZPA