Quiet day on sharemarket as investors watch US debt crisis

Investors were sitting on their hands and waiting to see how the United States debt crisis played out. File photo / NZ Herald

The New Zealand sharemarket finished a quiet session slightly lower yesterday as investors remained on the sidelines waiting to see how debt talks in the United States play out.

The NZX-50 index closed down 4.26 points at 3412.35, having fallen 11.5 points on Tuesday.

Abano Healthcare was unchanged on $4.44 after reporting a rise in full-year revenue from continuing operations. Grant Williamson, director at Hamilton Hindin Greene, said the result was in line with company guidance and investors' expec-tations.

"The shares are trading on pretty high fundamentals and investors will want to see growth in the 2012 year," he said.

Otherwise investors were just sitting on their hands and waiting to see how the United States debt crisis played out.

"Investors are not panicking as people believe that they have to reach agreement before the deadline - it is just a case of how close they are going to let it run before they do," Williamson said.

The US dollar fell to a three-month low yesterday as investors contemplated the prospect of a US debt default if no progress is made.

NZOG eased 3c to 67c after the company cut its estimate of reserves at the Tui oilfield in Taranaki.

APN News eased 5c, or 3.33 per cent, to $1.45 on small volume.

Scott Technology rose 5c to $1.45, also on light volume.

Among leading stocks, Telecom rose 2.5c to $2.65, and Fletcher Building rose 2c to $8.25, while Contact Energy was unchanged at $5.15.

Mainfreight rose 7c to $10.15 and Freightways rose 2c to $3.42. Air NZ rose a cent to $1.18 and Kathmandu rose 4c to $2.19.

OceanaGold lost 4c to $3.56.

In the United States, declining issues solidly outpaced advancing ones, even though major averages showed mostly modest declines.

A failure to raise the US debt limit by an August 2 deadline could unsettle markets and hurt the economy if the US puts off paying bills.

"Investors believe that there's going to be a resolution at the 11th hour, but many of those investors are starting to get cold feet," said Hugh Johnson, chief investment officer of Hugh Johnson Advisors in New York.

Just 6.53 billion shares changed hands on the New York Stock Exchange, NYSE Amex and Nasdaq, below the daily average of 7.49billion.

At the close, the Dow Jones industrial average was down 0.7 per cent at 12,501.30, the Standard & Poor's 500 Index was down 0.4 per cent at 1331.94, and the Nasdaq Composite Index was down 0.1 per cent at 2839.96.

- NZPA