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MARKET CLOSE: NZX50 sinks in light trading

Monday 25th January 2010

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New Zealand shares fell, pushing the NZX 50 index down for the 10th day in 11, reflecting weakness in global equity markets on ongoing concern growth will suffer with President Barack Obama’s plan to rein in banks.

Pan Pacific Petroleum (NZX: PPP ) led the falls decliners after announcing another dry well.

The NZX 50 fell 1.77, or 0.1%, to 3188.65, the lowest in a month. Within the index, 22 stocks fell, 15 rose and 13 were unchanged. Turnover was $31.8 million, partly reflecting a regional holiday in Wellington.

Shares were generally weaker across Asia today, with Japan’s Nikkei 225 index falling 0.3% and Australia’s S&P/ASX 200 declining 0.6%. Shares tumbled on Wall Street on Friday, with the Dow Jones Industrial Average sliding 2.1%.

Pan Pacific shed 8.3% to 44 cents after the oil company that’s part-owned by New Zealand Oil & Gas (NZX: NZO ) said the 15%-owned Lolotoe-1 well in the Timor Sea found no commercial quantities of hydrocarbons and will be abandoned. The nearby Lore-1 well was abandoned in December for the same reason.

“Unfortunately they have come up with a dry one,” said Grant Williamson, a director of Hamilton Hindin Greene in Christchurch. Pan Pacific is trying to buy in to permits “as the Tui field starts to wind down a little bit.”

NZ Oil & Gas fell 1.3% to $1.58 as the price of crude oil held below US$75 a barrel.

ANZ (NZX: ANZ ) fell about 3% to A$27.65 on the NZX and Westpac declined 1.3% to $31.40, mirroring the slide in Australian lenders on the ASX.

Nuplex (NZX: NPX ) rose 3.1% to $3.30, leading the index higher and adding to its 4.9% advance on Friday, when the specialty chemicals company said it made a record first-half profit, lifted its full-year forecast and reinstated its interim dividends. It was the latest of several upgrades.

“Maybe conditions are improving that quickly they are struggling to keep up,” Williamson said. “After that they have been through they were maybe a bit on the conservative side.”

Nuplex was forced to sell shares at a deep discount early last year to strengthen its balance sheet, when the value of its overseas debt jumped and demand waned.

Pike River Coal (NZX: PRC ) fell 1% to $1, adding to a 3.8% decline on Friday, when the mining company said hydro-mining at its South Island site would start in the third quarter – three months later than it predicted last August, meaning 120,000-150,000 tonnes of coal production will be deferred. The company has been considering options for additional working capital and will make an announcement in the next few weeks.

NZX (NZX: NZX ) fell 3.5% to $2.22 and jeweler Michael Hill International shed 2.9% to 68 cents.

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