NZ stocks: Shares flat as war fears dampen markets

12.32 pm

The New Zealand sharemarket was flat again this morning as investors indicated nervousness about spending in uncertain times.

Fears of retaliation against the US attacks on Afghanistan are suppressing markets including New Zealand's, which is down 0.03 per cent on the NZSE-40 capital index.

By 11am the index was down 0.49 point to 1874.16, and turnover was just 4.4 million shares worth $10.2 million , volumes which DF Mainland broker Greg Arnott said were "pathetic".

"I think the markets are braced for some kind of retaliation...investors are going to ground. Sure, there will be days when the Dow's up 100 points and we'll react to it and pop up 15, but on a generalised level, I'm seeing suppressed markets, sideways trends -- it's a wait and see attitude being adopted here."

Mr Arnott said there was growing concern that unrest was spreading in Muslim nations following the US attacks in Afghanistan. "Even down into Indonesia, you've got unrest...and political instability. Now that's pretty close to Australia."

Sharemarket heavyweight Telecom led the market down dropping 1c to 436 on $1.9 million worth of shares.

The Air NZ story was still a focus of the market, although the high interest of recent weeks showed definite signs of tailing off, with both A and B shares falling a cent to 29.

Slight rises were seen in several "defensive" stocks including Frucor, up 4c to 165, Fletcher Building up 1c to 272 , and Fletcher Forests up 1c to 25.

Jeweller Michael Hill rose 5c to 460, as did Port of Auckland (545), Sky City was up 8c to 1110, and Lion Nathan rose 4c to 568.

Mr Arnott said the tendency to swing towards food and other defensive stocks was coming through but even for them, liquidity was drying up.

Falls included Fisher and Paykel down 2c to 1344, Auckland Airport down 2c to 333, Westfield down 4c to 420, and The Warehouse down 1c to 595.

There were 25 rises and 30 falls on 86 stocks traded.

Wall Street investors also appeared unwilling to stick their necks out, especially on high tech stocks while military strikes on Afghanistan and prospects of a dismal earnings period continued to create uncertainty.

The technology-packed Nasdaq Composite Index snapped a five-session winning streak, falling 35.76 points, or 2.23 per cent, to end at 1,570.19.

Blue-chip stocks were also weaker, and the Dow Jones industrial average fell 15.50 points, or 0.17 per cent, to 9,052.44. The broader Standard & Poor's 500 Index dropped 5.69 points, or 0.54 per cent, to 1,056.75.

- NZPA