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Market Close: NZ stocks snap 4-day rally, Telecom declines

Monday 1st December 2008

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New Zealand stocks fell, snapping a four-day rally, amid concern economic data out of the U.S. this week will show a worsening slump, eroding demand for equities.

The NZX 50 Index fell 28.032, or 1%, to 2682.928. Within the index, 23 stocks fell, 15 gained and 11 were unchanged. Telecom led decliners, falling 6.4% to NZ$2.33 after the company said a loss of its broadband services over the weekend may have been due to a power fault in Auckland.

Pike River Coal fell 2% to 98 cents amid signs that coking coal prices will fall as demand from steelmakers abates. Prices may fall to US$200 a metric ton in the year starting April 1, from US$300 a ton this year, according to a Bloomberg survey of analysts.

In Japan, the Nikkei 225 Index was 1.4% lower in mid-day trading, led by Suzuki Motor and Mazda. Australia’s S&P/ASX 200 Index fell 1.6% to 3681.8 in late afternoon trading, led by resources companies such as Rio Tinto. Fortescue Metals soared 31% amid rumours BHP Billiton may make a takeover bid or Chinese companies seek a stake. Fortescue said it couldn’t explain the surge.

U.S. figures this week may show manufacturing shrank and employers slashed jobs, adding to signs of a deepening recession.

“The macro-economic news it going to get even worse,” said Paul Richardson, who manages about NZ$150 million at BT Funds Management. “Volumes are quite thin and the market is wobbling sideways.”

Dorchester Pacific slumped 50% to 10 cents after posting a first-half loss of NZ$35 million, reflecting a write-off of its stake in ailing finance company St Laurence and an impairment charge against assets. Dorchester needs support from investors for a deferred repayment plan if it is to avoid being placed in receivership.

Air New Zealand declined 2.3% to 87 cents as divers recovered bodies and the flight recorder from the company’s Airbus jet that crashed into the Mediterranean Sea.

Rakon extended its revival, rising 6.4% to NZ$1.49. The navigation technology company slumped as low as NZ$1 after posting a 66% decline in first-half profit on operating losses in France and weaker world demand.

Some investors “are starting to see light at the end of the tunnel for some of these dreadfully beaten-up sectors,” Richardson said.


NZX Top 50
Last updated: 1/12/2008 5:09pm
AIA 1.72 -0.03
AIR 0.87 -0.02
AMP 6.20 -0.40
ANZ 17.50 +0.35
APN 3.10 0.00
APT 0.97 0.00
CAV 2.01 -0.06
CEN 6.70 -0.05
EBO 4.25 0.00
FBU 5.55 -0.03
FPA 1.35 +0.03
FPH 3.09 +0.02
FRE 2.95 +0.05
GFF 1.54 -0.06
GMT 1.06 +0.03
GPG 0.93 0.00
HLG 2.25 -0.03
IFT 1.72 +0.02
IMP 1.06 +0.02
ING 0.66 +0.01
KIP 1.03 +0.02
LNN 10.25 -0.05
MFT 4.80 -0.05
MHI 0.58 0.00
MVN 1.30 0.00
NPX 3.65 -0.10
NZO 1.30 -0.01
NZR 6.32 -0.06
NZS 0.88 -0.02
NZX 5.65 -0.09
PFI 1.00 0.00
PGW 1.57 -0.05
POT 5.90 0.00
PPL 1.13 -0.01
PRC 0.98 -0.02
RAK 1.49 +0.09
RYM 1.46 0.00
SAN 5.30 -0.05
SKC 3.03 -0.12
SKL 0.77 0.00
SKT 3.30 -0.05
STU 2.76 +0.06
TEL 2.33 -0.10
THL 0.72 +0.02
TLS 5.00 0.00
TPW 6.80 +0.11
TWR 1.50 -0.05
VCT 2.00 +0.02
WBC 21.20 +0.70
WHS 3.45 -0.18

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