NZ stocks: Turbulent trading closes flat

The sharemarket closed flat yesterday after a leaked survey of business confidence showed a sharp pullback in confidence levels for the March quarter.

The benchmark NZSE-40 index closed down 0.85 points at 2049.72, on turnover worth $77.8 million.

"Word got out about a business confidence survey which was a bit weaker than I think people were expecting," Deutsche Securities broker Shane Gavegan said.

The New Zealand Institute of Economic Research's March Quarterly Survey of Business Opinion showed a net 2 per cent of firms were pessimistic about the general business situation in the next six months from the net 21 per cent positive in the December quarter.

Traders said the survey result would allow the Reserve Bank to cut interest rates again sooner rather than later.

"The market is now picking that it will be a 25 basis point cut minimum," Mr Gavegan said.

The Reserve Bank next meets to discuss rates on April 19.

Air New Zealand provided the main news of the day when its A shares slumped below $1 to a 10-year low following the temporary grounding of the flagship planes of its Australian subsidiary, Ansett.

Air NZ A shares dived 4c to 97c following the news, closing down 2c at 99c, while its B shares, open to all, hit a low of $1.35 mid morning, before recovering slightly to close down 6c at $1.42.

"There are not too many stories out there that are positive for it at the moment," Mr Gavegan said.

Currency woes plagued some stocks after the premature publication of the business survey - originally due out on April 18 - spooked the forex and wholesale money markets. The New Zealand dollar lost over half a US cent on the news and 90-day bank bill yields fell sharply - to 6.01 per cent from 6.11 per cent. The kiwi recovered slightly in afternoon trading to close at 40.12USc.

Sky TV fell 15c to $3.30 in light trade on fears that the falling currency would drive up the cost of its US programming. Increased competition created by Telstra Saturn's entry into the pay-TV market is also worrying investors.

Other stocks to lose ground included Telecom, down 4c at $5.83, and Fletcher Building, down 2c at $2.34.

Rubicon topped market turnover by volume to close down 1c at 47c.

On the upside, AMP, under chief executive Paul Batchelor, shot up 79c to $26.30, Baycorp rose 15c to $12.05, and Sky City closed up 13c at $9.25.

UnitedNetworks fell a further 15c to $8.25 following a 30c fall on Monday after cornerstone shareholder Utilicorp sold down 7.5 per cent of its holding.

Turnover would likely remain light for the rest of the week, unless there were any wild movements in the United States, Mr Gavegan said. "You have got school holidays and Easter coming up so some people have been taken out of the market."

- NZPA