NZ sharemarket 'quiet'

The New Zealand sharemarket slipped today after a promising start to trading with some modest gains.

The biggest stock on the NZX, Telecom initially lifted 1.5 per cent but was dragged back later in the day to close at 270, down 1c (0.37 per cent) in a quiet day.

And the recent rally in Fletcher Building shares - up more than 50c in the previous five trading days - cooled off sharply, as its shares slumped 9c to 795, despite having traded as high as 807c yesterday. It recovered some ground late in the day, to finish at 80c, down 2c (0.25 per cent drop).

The benchmark NZSX-50 index initially rose 4 points - after easing 1.1 points yesterday - but from 2pm slid steeply to close at 3116.41, down 0.165 per cent and 5.14 points for the day.

Only 33.5 million shares, valued at $78.1 million changed hands, and Stephen Wright, of ASB Securities, said both the NZ and Australian markets had drifted today.

There was a slightly negative tinge in Australasia, partly based on multiple warnings that the rising NZ dollar could harm the performance of exporters on which the nation's economic recovery would be based.

"The recovery may, to some extent, already built into prices, and investors need further good news," said Mr Wright, who predicted good corporate results were still some distance away.

Grant Williamson, director at broker Hamilton, Hindin, Greene, said the flat performance was largely due to investors still waiting on guidance from tomorrow's Reserve Bank's (RNZ) monetary policy statement.

He noted that Briscoes' share price had risen 1c to 116, after the company reported it was optimistic about retail results in the second half of the year. Other retailers were also trading higher: The Warehouse was up 4c to 404, and Hallensteins was up 13c to 300, though both involved only low volumes, and Pumpkin Patch rose 3c to 190.

"It's been a good day for the retailers, but apart from that there wasn't a lot going on," he said.

Freightways rose 11c to 317, Tourism Holdings lifted 1c to 58, Ebos Group lifted 13c to 608, and Sky TV was up 4c at 455.

M r Williamson said the rise of the NZ dollar exchange rate was putting pressure on exporters, such as Fisher & Paykel Healthcare which fell 3c to 335.

"The speculators are certainly in on the kiwi at the moment," he said.

Another leading stock, Contact Energy, fell 6c to 602. Other listed electricity companies were also down: Trustpower by 9c to 751 and Vector - which went ex-dividend today - fell by 8c to 197.

Australian stocks slipped from their 11-month high to end little changed as retail sales on that side of the Tasman dropped.

The benchmark S&P/ASX 200 index ended down 1.6 points at 4522.2, after touching a high of 4554.7, following three days of gains.

In the US, stoc ks advanced on an uptick in corporate deal activity while the weak US dollar led to gains in commodities, lifting shares of oil and mining companies.

Kraft Foods Inc, North America's biggest food company, said it was intent on pursuing Britain's Cadbury despite the confectionary company's rejection of a US$16.7 billion ($24.3b) Kraft bid made on Monday.

The Kraft bid comes after France Telecom and Deutsche Telekom announced plans to merge their British mobile units.

Last week, Walt Disney Co's said it will buy Marvel Entertainment Inc for US$4b, fueling hopes of a pick-up in merger activity.

The Dow Jones industrial average closed up 0.6 per cent at 9497.34, the Standard & Poor's 500 Index rose 0.9 per cent at 1025.38, and the Nasdaq Composite Index gained 0.9 per cent at 2037.77.

- NZPA