NZ stocks: OCR move casts pall over sharemarket

6.15pm

Hawkish comments by Reserve Bank of New Zealand governor Alan Bollard when he raised the official cash rate today helped drag the sharemarket lower, a broker said.

At 5pm, the benchmark NZSX-50 index was down 7.41 points at 2603.80, while the NZSX-All capital index was down 1.55 points at 873.97.

Shares in market giant Telecom seesawed during the day, initially shedding 7c to 541 after Dr Bollard raised the cash rate to 5.75 per cent.

They later rallied to close up 4c at 552, having traded $72.9 million worth of the $120.5 million turnover on NZX.

Among the 157 stocks traded today were 49 rises and 62 falls.

Greenslades broker Paul Valk said the market had seen good liquidity and flow, though Dr Bollard's decision to lift the cash rate and his hawkish comments cast a pall over NZX.

"That's pushed the market lower... people get a nervous that it (the rate rise and accompanying comments) is going to have a quietening effect on the economy," Mr Valk told NZPA today.

Stock noticably affected by the news included: Carter Holt Harvey down 4c at 197, Fletcher Building down 3c at 433, and Infratil down 6c at 290.

Dr Bollard has signalled a series of further rises later this year to counter a predicted inflation shock.

In other market news, Sky City Entertainment said it had acquired 95.75 per cent of Sky City Leisure, sparking a compulsory acquisition of the shares it did not currently own.

Sky City Entertainment was down 2c at 467, while Sky City Leisure was unchanged at 79c.

"That (the share price dips) just part of the general market trend," Mr Valk said.

Meanwhile, Tenon has restructured its board following Rubicon's success last week with its partial takeover offer.

Tenon chairman Sir Dryden Spring has resigned and been replaced by Rubicon and Guinness Peat Group director Tony Gibbs.

"That's been pretty well signalled and obviously the market has viewed that as positive," Mr Valk said.

Tenon was up 3c at 197, while Rubicon was up 1c at 85.

Other stocks on the move included: Baycorp Advantage up 9c at 324, Cavalier 8c at 490, Fisher & Paykel Healthcare up 10c at 1325, Kirkcaldie & Stains up 10c at 225, Michael Hill International down 9c at 582, NZ Oil and Gas up 1c at 63, NZ Refining down 20c at 1935, and Westfield down 7c at 468.

- NZPA