NZ stocks: Shares close flat as Telecom reverses rally

The New Zealand sharemarket closed flat today after top stock Telecom lost its grip on an early rally.

The NZ50 gross index closed down 1.99 points at 1931.61, while the NZSE-40 capital index ended up 1.70 points at 1896.74.

Turnover of 18.20 million stocks was valued at $54.74 million.

Telecom, which has a hefty 28 per cent weighting in the top 50 index, kept the market in the black for most of the day, but gave up early gains to close down 5c at 456 compared with an intraday high of 467.

That was despite reassurances from chief executive Theresa Gattung that the firm will focus on debt reduction and raise its dividend payout and a confirmation from chief financial officer Marko Bogoievski that the company is comfortable with analysts' average expectations for 2002/03 of $670-700 million.

In the broader market, tourism stocks continued to feel the heat of the war, global economic downturn and the Sars (severe acute respiratory syndrome) outbreak.

Auckland International Airport plunged a further 14c to 491 as airlines slashed flights in the wake of reduced demand, while Sky City - which has a big Asian customer base - lost 5c to 780.

"Two stocks that would be in the limelight there are Auckland Airport and Sky City," Forsyth Barr Frater Williams broker Alan Wills said.

Air New Zealand slipped a cent to 47c after saying today it would continue most services to Asia despite cutting some flights to Japan and Hong Kong due to booking cancellations driven by fear of Sars and the Iraq war.

The airline also announced it would allow customers who had booked to fly through the most affected countries on, or before April 2, to reschedule or delay their flights until July 31.

Property stocks strengthened as investors sought a relative safe haven for their money, with New Zealand property investor Kiwi Income Property Trust adding 2c to 109.

"People are viewing these listed property trusts as being a nice safe place in a time of equity market uncertainty," Mr Wills said.

Tranz Rail closed flat at 94c following news bus operator Stagecoach won't bid for the Wellington commuter rail network under the terms offered by Tranz Rail.

Tranz Rail advertised internationally last month for a buyer and speculation was strong that French-based Transdev, Connex Australia Group, Serco and Stagecoach were likely contenders. But all except Tranzdev have since said they will not make bids.

Stagecoach executive chairman Ross Martin said the company did not want any role in the proposed "part sale", which stipulates that Tranz Rail will keep control of critical aspects of the business.

In other news, Tranz Rail and Port Otago said today they had formed a strategic partnership.

The companies signed a heads of agreement that includes a range of initiatives to promote the use of rail to and from Port Chalmers.

In the banking sector WestpacTrust gave up most of its recent gains, closing 30c lower at 1570. ANZ was steady at 1990.

Briscoe Group closed flat at 183, Carter Holt Harvey added a cent to 172, Fisher & Paykel Healthcare rallied 40c to 955, Contact Energy was up 4c at 436, Fisher & Paykel Appliances added 20c to 965, The Warehouse slipped 5c to 546 and Baycorp Advantage lost a cent to 138.

In all, rises outnumbered falls by 46 to 33 among the 116 stocks traded.

On Wall St the Dow Jones industrial average finished up 215.2 points, or 2.67 per cent, at 8285.06; the broader Standard & Poor's 500 Index climbed 22.42 points, or 2.61 per cent, to 880.90; and the Nasdaq Composite Index was up 48.42 points, or 3.59 per cent, at 1396.72.

- NZPA