NZ stocks: Shares pull back sharply from yesterday's high

12.45pm

The New Zealand sharemarket's benchmark index pulled back from yesterday's record closing high after the US market suffered one its worst days this year.

By midday the NZSX-50 gross index was down 22.25 points to 2772.35, while the NZSX all capital index was down 7.64 points to 934.13.

Overnight US stocks suffered one of their sharpest declines of 2004 as New York crude oil prices resumed their march higher chasing investors from equities.

Forsyth Barr dealer Alan Wills said the local market's decline this morning was "the first substantial pull back we've had for a while".

"It may be more to do with what happened in New York, but our market has had a fairly good run. It has been driven by the leaders and has been driven by foreign investors, and if they're taking a breather today then the market's inevitably going to fall back."

Market heavyweight Telecom led the way down and was 8c lower at 611 just a day after investors welcomed its increased dividend policy announced with its annual result yesterday.

But Mr Wills said the telco's fall was nothing to do with its result.

"I think it's just a lack of foreign interest in that stock and we do need that foreign interest on a daily basis just to keep prices bubbling along."

Fletcher Building was down 4c to 488. Mr Wills attributed the slip to general market weakness and added the company was expected to post a very good result next week.

Meanwhile homeware and sports goods retailer Briscoe Group was down 5c to 133 after warning its first half profit would fall by up to 36 per cent following a dip in second quarter sales.

The company today forecast the first half net profit would be between $3 million and $3.5m below last year's result.

Air New Zealand was unchanged at 40c. The airline announced a share consolidation plan which will see every five of its ordinary shares converted into one share at the close of business on August 23.

Fund manager Axa Asia Pacific Holdings powered 47c higher to 400 after it said it was considering an overnight A$3.1 billion ($3.42 billion) bid by its parent company, AXA SA to buy out the 48.3 per cent of shares it does not already own at A$3.75 a share.

Under the bid AXA SA assumes it will retain the half year interim dividend of A5.25 cents announced today.

Other stocks to move in morning trade today included: Auckland International Airport down 6c to 705, Carter Holt Harvey down 5c to 214, Contact Energy down 2c to 598, Fisher & Paykel Healthcare down 18c to 1340, CanWest Media Works down 4c to 157, NZX down 5c to 830, Ports of Auckland down 5c to 705, Port of Tauranga down 5c to 505, Sky City down 3c to 484, SkyTV down 4c to 525 and The Warehouse down 3c to 442.

There were 18 rises and 52 falls among the 123 stocks traded and total turnover by late morning was worth $42.6 million.

- NZPA