NZ stocks:Shares reverse gains as new quarter spells trouble

12.00pm

New Zealand shares started the new financial quarter on the back foot today as global uncertainty and emerging local issues like electricity, dairy payouts and a softening retail outlook took their toll.

The benchmark NZ50 index was down 14.55 points, or 0.75 per cent, at 1917.06 by just after 11.30am -- erasing yesterday's gains. The NZSE-40 capital index eased 11.32 points to 1883.56.

Turnover was light at $26 million.

"The broader market just started a new financial quarter and you'd have to say the outlook hasn't really changed," ABN Amro Craigs retail equities adviser Nigel Scott said.

With a war in Iraq and domestic issues such as looming electricity shortages, lower than expected dairy payouts and a tightening retail market, "investors will remain patient", he said.

Among the leaders this morning, Telecom shed 6c to 446, Auckland International Airport was off 4c to 520, Carter Holt Harvey dipped 2c to 176, Tranz Rail was off 2c to 96c, The Warehouse was flat at 558, Contact Energy lost a cent to 421, and Sky City was down 4c at 786.

Falls outnumbered rises by 31 to 20 among the 99 stocks traded so far.

Fletcher Building dived 7c to 335 after figures out today indicated the heat is coming out of the buoyant construction sector. Statistics New Zealand reported seasonally adjusted new dwelling consents fell 15.4 per cent to 2093 in February, compared with the previous month.

Air New Zealand was flat at 48c after announcing yesterday it was cutting its international flights by about 3 per cent due to reduced forward bookings following the war and the severe acute respiratory syndrome (Sars) outbreak.

Horizon Energy bounced 30c to 300 on light volume and Powerco was 2c higher at 140 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, according to the latest available data. 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