NZ stocks: Market fails to hang on to early gains

The New Zealand sharemarket failed to hang on to early gains today and fell in line with offshore market weakness from Friday.

At 5pm the NZX-50 was down 9.54 points to 3525.91, while the All Index was down 3 points to 1016.35 on a low $65m turnover.

"It's typical Monday trade -- very quiet," Hamilton, Hindin, Greene partner Grant Williamson said.

The Australian market was also down around 1 per cent, as a stronger-than-expected rise in producer prices increased the chance of higher interest rates and weighed on bank stocks.

Telecom found some support off its lows, up 2c to 405 on turnover worth $27.7 million.

Fletcher Building continued to come under pressure ahead of its upcoming annual profit result and a weakening building sector in Australia. The stock was back 7c to 860 today.

Mr Williamson said next months' slew of company reports might help turn the market around from its present doldrums.

Carpet manufacturer Feltex Carpets, which had been seeking a new cornerstone investor to inject capital, was placed on trading halt ahead of a new announcement.

The halt is expected to last at least two trading days.

Fisher & Paykel Appliances rose 3c to 463 as the company announced it was on track for a predicted $75-80m profit.

Hallenstein Glasson lost 10c to 520 after a tepid profit forecast on Friday. The company said its New Zealand business was doing well but its Australian stores had struck tough trading conditions.

"Investors will just be a little concerned, we've seen so many companies go into Australia and end up losing rather large amounts of money, although I don't think this is the case this time," Mr Williamson said.

Auckland Airport eased 2c to 211 after a $1.4b revaluation led airlines to voice fears of a hike in landing and passenger charges.

Goodman Fielder lost 9c or 3 per cent to 244 as Credit Suisse cut its rating to netural from outperform, saying it faced higher competition on its edible oils business and had lost a milk supply contract to a rival.

The NZX's strong run ended with a 3.8c loss to 604.

Mr Williamson said the exchange had performed very well, up 40c on the adjusted basis, "which is maybe a wee bit surprising considering the low volumes traded on the New Zealand market and the lack of new floats coming along".

Falls outnumbered rises 55 to 29 at 137 stocks.

In the US, stocks continued to suffer on the back of uncertainty how much the violence in the Middle East would affect oil prices.

At Friday's close, the Dow Jones dropped 59.72 points, or 0.55 per cent, to end at 10868.38, while the S&P's 500 Index slid 8.84 points, or 0.71 per cent, to finish at 1240.29.

- NZPA