Lion, Carters active in weaker session

Lion Nathan was in the spotlight on the Stock Exchange yesterday, experiencing heavy activity after announcing its plans for Montana Wines, said Nigel Scott, of ABN Amro Equities.

Lion Nathan said it planned to buy a further 5 per cent of wine company Montana at between $2.21 and $2.65, which would increase its stake to 24.97 per cent.

"The major talking point today has been Lion's potential future move to protect itself in its Montana investment against any possible moves by Southcorp or Fosters."

Lion closed unchanged at 495 on turnover of 1.7 million shares worth $8.47 million, while Montana was up 7c at 250.

That was against a weaker NZSE-40 Capital Index, which closed down 9.35 points (0.44 per cent) to 2103.88 on turnover of $104 million, of which just over $51 million was pre-market.

Falls outnumbered rises 64 to 36 among the 154 stocks traded.

A stronger local currency influenced the sharemarket, Mr Scott said.

"During the day the currency actually rallied, particularly versus the Australian dollar, which made it a bit more tough dealing into the Australian market."

The other major focus was on Carter Holt Harvey, which closed up 6c at 193.

"There has been a lot of recent selling of Carters - maybe that's just starting to abate," Mr Scott said.

Fletcher Paper's exit would also see investors in that sector switching to Carter Holt.

Carter Holt Harvey was fined $525,000 yesterday by the Commerce Commission for breaching competition rules, but said it would appeal.

Carter Holt's first quarter result is due out on Thursday, and Tranz Rail's year result today. Tranz Rail closed unchanged on 405.

Waste Management reported it had increased its half year profit to $6.7 million from $5.4 million for the six months to June 30.

"That was a pretty reasonable result which the market liked a lot," Mr Scott said.

The stock rallied 11c to 394.

Elsewhere on the market, the Fletcher stocks suffered on the first day without the Paper letter stock. Energy came off 30c to 685, while Building was down 2c at 238 and Forests softened 1c to 86.

"There is a bit of normal profit-taking coming through in Fletcher Energy. It has run very strong and people are sticking to the mid-ground here at the moment," Mr Scott said.

Market giant Telecom closed down 3c at 712 on turnover of 4.2 million shares worth $30.3 million.

Also on the downside, Fisher and Paykel lost 10c to 725, Guinness Peat was off 2c at 128, INL 5c to 405 and Nufarm, which said it had sold its construction chemical business, 10c at 430.

Contact Energy continued to retreat, by 2c at 268, Sky City weakened 8c to 707 and Tower lost 3c to 515.

Mr Scott said yesterday had been "a real mixture" for the last day of the month.

"This month has been dominated by the Fletcher (Paper) transaction and the movement in Fletcher Energy," Mr Scott said.

Other features of the month included the recovery in Auckland Airport's stock price, the continued rise of Baycorp, a strong run in Fletcher Energy and a very strong run in The Warehouse.

"Four majors this month have done very well," Mr Scott said.

However Auckland Airport lost 3c yesterday to close at 286, while The Warehouse was off 2c at 580. Baycorp rose 3c to hit the $12 mark.

In the US stocks were savaged on Friday and the tech-rich Nasdaq market slumped almost 5 per cent after news of surprisingly strong US economic growth raised the odds the Fed will raise interest rates again. The Nasdaq dropped 179.23 points - or 4.66 per cent - to 3663.00 and brought it 10.54 per cent lower for the week.

- NZPA