NZ stocks: Rates hike ignored by sharemarket

12.00pm

The central bank's decision to raise interest rates today had virtually no impact on the New Zealand sharemarket.

By mid-morning the NZSE-40 capital index was down 4.52 points, or 0.22 per cent, at 2064.98 on turnover of 11.89 million stocks valued at $24.18 million.

Sam Macdonald of DF Mainland said small investors continued to stand on the sidelines, waiting to see where and when the US finds its feet.

"It's the same flavour as yesterday, we're still just lacking direction really. I think we're following suit with our US counterparts -- the volume has dropped out of the market, certainly from the smaller investor," Mr Macdonald said.

However, considering the falls recently seen on the US equity markets the New Zealand sharemarket was "holding up fine", he said.

The Reserve Bank's decision to raise the Official Cash Rate by 25 points to 5.75 per cent was as expected, boosting the New Zealand dollar but provoking little reaction from the sharemarket.

"We haven't seen any order flow post the OCR announcement."

On the market, Telecom had a having a breather from yesterday when it closed up 6c."

Telecom was down 5c at 503 today.

"The ADR (American Depositary Receipts) price signalled where we were heading, we've just came back in line with the closing price in the US," Mr Macdonald said.

"There looks to be a bit of selling around today, as opposed to yesterday when there was a bit of buying, but I think it will hold 500.

"Airports continue to be under a bit of pressure (down 4c at 430), just order flow."

Utilities company UnitedNetworks, which has attracted 20 bidders for its business, rose 18c to 890 on 606,169 shares.

Other movements today were on minimal volume, with The Warehouse falling 3c to 747 on just 56,874 shares. Sky City Casino was up 4c at 627, Sky TV rose 4c to 425, Baycorp Advantage was up 1c at 396, Contact Energy was up 1c at 400, and Fletcher Forests rose 1c to 24 while Building shed 1c to 269.

Guinness Peat Group lost 2c to 168, Carter Holt Harvey was down 2c at 194, and Briscoe Group shed 3c to 212.

Plastic packaging company Vertex, which listed on Monday at 197, compared with its issue price of 205, regained 2c to reach its issue price after a dismal performance so far.

There were 44 falls and 18 rises on the 102 stocks traded.

On Wall Street, the S&P 500 fell 20.56 points, or 2.12 per cent, to 948.09; the technology-laced Nasdaq Composite Index fell to a 5-year low for the second straight session, dropping 46 points, or 3.27 per cent, to 1357.85; and the Dow Jones industrial average was down 102.04 points, or 1.12 per cent, at 9007.75.

- NZPA