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MARKET CLOSE: NZ sharemarket down as others fall

Thursday 12th May 2011

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The New Zealand sharemarket fell today but losses were less pronounced than in other markets and Telecom had another good day.

Nuplex was punished for issuing an earnings downgrade but finished off lows and commodity stocks were under pressure as turbulence in international commodity markets again frightened investors.

The benchmark NZX-50 index closed down 18.559 points, or 0.521%, at 3540.312, having yesterday climbed 30.1 points to its highest level in nearly three years. The percentage decline was about half that of the Dow Jones index on Wednesday.

Nuplex (NZX: NPX ) closed down 8c at $3.08 after issuing a profit warning. James Smalley at Hamilton, Hindin, Greene said that to put it in context the stock had fallen from around $3.70 in February and at its lows today at $3.00 it was not expensive on earnings multiples.

"The earnings guidance puts them at a price-to-earnings ratio of about 9.8 times so you are not looking at a stock that is priced for shoot the lights out results here," said Smalley said. "But a downgrade is never flash."

Telecom (NZX: TEL ) rose 2c to $2.33, following a 7c rise yesterday.

"There were big volumes through Telecom today," said Smalley.

He said the stock offered investors a great yield and many of the stocks that bucked the down trend today offered good yields in comparison to money invested in bank deposits.

OceanaGold (NZX: OGC ) shares were down 21c to $3.16 after an 8% fall in spot silver prices, while spot gold fell 1%.

Argosy Property (NZX: ARG ) was unchanged at 82 and its would be suitor DNZ Property (NZX: DNZ ) was down 2c at $1.33.

Sky City (NZX: SKC ), which announced senior management appointments today, was down 2c at $3.73.

Mainfreight (NZX: MFT ) gained 9c to $9.40, Scott Technology (NZX: SCT ) was up 7c to 41.50, Fletcher Building (NZX: FBU ) was down 9c at $8.96 and Contact Energy (NZX: CEN ) was down 5c at $5.99.

In the US, stocks nearly erased a three-day rally as energy and other commodity shares sank, feeding worries about the market's ability to stay on its upward path.

The Dow Jones industrial average was down 1% at 12,630.03, the Standard & Poor's 500 Index was down 1.1% at 1342.08, and the Nasdaq Composite Index was down 0.9% at 2845.06.



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