Modest gains on NZ market

Modest gains in early trading on the New Zealand sharemarket today were eroded as it ran out of buyers and profit-takers stepped in.

It finished virtually unchanged despite firm rises in Europe and Asia, though brokers noted there was no impetus from Wall Street, where markets were closed for the Labor Day public holiday. Australian shares rose 1.5 per cent today to an 11 month high.

Grant Williamson, director at Hamilton, Hindin, Greene, said there could also have been some effect from investors going into waiting mode for the Reserve Bank's (RNZ) monetary policy statement on Thursday.

"They may be a bit hesitant," he said. The NZ dollar was still riding high in exchange rates and there was some question over what tools the RBNZ could bring to the task, as its attempts to talk down the dollar had not succeeded.

The benchmark NZSX-50 index rose 24.4 points yesterday to close at 3122.69 and quickly lifted today to trade as high as 3138.78 -- but finished the day back down at 3121.55. It fell 1.137 points (36 per cent) over the day to finish up just about where it began. This time last year, it was at 2715.71.

The volume of 28.9 million shares traded today was worth $81.06m

Mr Williamson said the standout stock was Fletcher Building, still rising on the optimism of investors who think New Zealand is now clawing its way out of recession. Fletcher Building rose 9c yesterday and repeated that effort again today to finish at 804. But he said the rise and rise of the NZ dollar exchange rate was hurting export-oriented stocks, such as Fisher and Paykel Health, which fell 2.5 per cent, by 9c to 338.

NZ Farming Systems Uruguay continued its slide, falling 2 per cent, a 1c drop to 48.

And Telecom fell 7c to 271, also a 2.5 per cent drop. Contact Energy lifted 3c in early trading, but finished the day down 1.14 per cent, 7c below yesterday, at 608c. Nuplex lifted 5c early to 240 and held the gain to the close, and NZ Refining Co initially lifted 5c but finished back where it was on Monday: 495. Freightways - which will shortly step up to the NZ 15 index - gained 9c to 306, a lift of over 3 per cent.

The Warehouse added 3c to 400.

Sky TV was down 3c in early trade but recovered to finish the day at 451, up 6c. Hellaby Holdings lost 5c on low volume, and then drifted up 7c to 157.

In Europe, stocks closed higher, extending gains after a massive takeover bid by Kraft Foods for British rival Cadbury signalled a further return to normality in the markets.

In London, the FTSE 100 index of leading shares jumped 1.7 per cent, while in Frankfurt the DAX added 1.5 per cent.

- NZPA