NZ Stocks: Shares reverse gains as year end bidders evaporate

New Zealand shares eased off the throttle today as investment dried up after an end-of-financial-year spurt yesterday.

The benchmark NZ50 index closed down 6.84 points at 1924.77, while the NZSE-40 capital index was 4.3 points lower at 1890.61.

Turnover totalled a moderate 18.12 million stocks valued at $50.62 million.

ABN Amro Craigs retail equities adviser Nigel Scott said that with war raging in Iraq and issues like an electricity shortage, lower dairy payouts and a softening retail outlook emerging locally, investors were sticking to the sidelines.

"The broader market just started a new financial quarter and you'd have to say the outlook hasn't really changed," he said.

Lower-than-expected building consents figures out today also put a dampener on market sentiment.

The seasonally-adjusted Statistics New Zealand figures showed consents were issued for 2093 new dwellings in February, down 15.4 per cent from January.

That followed a revised 11.1 per cent fall in January, from December, and shows the booming construction sector - which peaked at a 26-year high of 3412 actual consents in October - may be losing its fizz.

"Today's data add to evidence from the retail sector and the market for existing homes that domestic demand is slowing," Deutsche Bank economists said.

Building materials company Fletcher Building slipped 9c to 333 on the figures, Fisher & Paykel Appliances was down 12c at 933 and carpet maker Cavalier eased 2c to 395.

The data is notoriously volatile, but economists said it was a sign the very cyclical sector was heading from a boom to a bust phase.

"Make no mistake, this is a cycle and it's going down," JB Were economist Bernard Doyle told Reuters.

Among other key movers today, Telecom shed 2c to 450, Auckland International Airport was off 7c to 519, Carter Holt Harvey dipped a cent to 177, Tranz Rail was off 3c to 95c, The Warehouse eased a cent to 557, Contact Energy gained 4c to 426, and Sky City was down a cent at 789.

Falls outnumbered rises by 46 to 35 among the 120 stocks traded.

On the upside, Air New Zealand closed a cent higher at 49c after announcing yesterday it was cutting its international flights by about 3 per cent due to reduce forward bookings following the Iraq war and the severe acute respiratory syndrome (Sars) outbreak.

Horizon Energy bounced 25c to 295 on light volume and Powerco was 4c higher at 142 after the Commerce Commission's much-awaited decision on regulating power line companies was released yesterday.

The commission imposed price and quality thresholds on electricity lines companies to limit their natural monopolies, but it backed away from limiting profits.

It has also forbidden the 29 network companies including national grid operator Transpower to lift prices until March 31 next year.

In the United States stocks fell for the fourth straight session on Monday, as fears about a prolonged war in Iraq and a report showing a decline in Midwest manufacturing renewed worries about the US economy.

The Dow Jones industrial average finished down 153.64 points, or 1.89 per cent, at 7992.13. The broader Standard & Poor's 500 Index shed 15.32 points, or 1.77 per cent, to end at 848.18. The Nasdaq Composite Index fell 28.43 points, or 2.08 per cent, to 1341.17.

- NZPA