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Market Close: Stocks mixed, Methven up, Fletcher falls

Thursday 30th October 2008

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New Zealand stocks were mixed, with the NZX 50 Index gaining 0.6%. Tap maker Methven rose after the company posted a jump in profit. Fletcher Building fell amid concern construction activity will slide.

The NZX 50 rose 17.223 to 2762.82, its second daily gain after four straight declines. Methven jumped 7.7% to $1.40 after reporting a 29% gain in first-half profit on earnings from the UK.

Fletcher fell 2% to $5.49 after National Bank's Business Outlook showed residential and commercial building intentions have tumbled. PGG Wrightson gained 1.9% to $1.62 after chairman Craig Norgate said the rural services company probably won't complete its investment in Silver Fern Farms in its current form.

New Zealand's benchmark index lagged behind gains in the Asia Pacific region's stock markets. In Tokyo, the Nikkei 225 Index was up 8.8% in mid-day trading, with Mazda Motor soaring 19%. Australia's S&P/ASX 200 Index rose 4% to 4004.20 in late afternoon trading, led by mining companies after a measure of metals prices rose. Lihir Gold jumped 19% to A$2.05, BHP Billiton gained 7.8% to A$28.34 and Rio Tinto advanced 7.6% to A$76.18.

"We think the market generally is cheap," said Craig Brown, who helps manage more than $2 billion at ING New Zealand. Still, "there's not a lot of deep selling out there" so bargain hunters may find it harder to buy much stock, he said.

Helping sap demand for stocks, National Bank's survey showed a record slump in business confidence this month, a sign that the nation's recession may be prolonged as the global economy falters. Global freight rates, a barometer of growth, have "plummeted," according to the bank's chief economist Cameron Bagrie.

In New Zealand, Mainfreight Ltd., the biggest transport company, fell 3.8% to $5.10. Rival Freightways dropped about 2% to $3.

Auckland International Airport was unchanged at $1.76, paring an earlier gain, after the nation's busiest gateway said full-year profit will probably be at the low end of its forecast range as the global economic downturn crimps demand for travel.

The company "is not immune to the heightened effects of a global recession," Chairman Tony Frankham said in a statement for the airport's annual shareholders' meeting.

Stock exchange manager NZX gained 0.8% to $6.05 after agreeing to acquire agricultural information service ProFarmer Australia, adding to its farm products data assets and extending its overseas reach.

Lyttelton Port rose 1.4% to $2.25 after saying it has revived talks for a merger with Port Otago, a further sign that consolidation in the shipping industry is forcing posts to follow suit.

By Jonathan Underhill



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