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MARKET CLOSE: NZ stocks fall on Fed's big spend, TrustPower paces decliners on earnings slump

Thursday 4th November 2010

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New Zealand stocks fell for the first time in three sessions, retreating from recent highs as investors looked to book profits. TrustPower paced decliners after reporting slump in interim profit, while Argosy Property Trust led gains.

The NZX 50 Index fell 6.8 points, or 0.2%, to 3,326.25. Within the index, 21 stocks fell, 15 rose and 14 were unchanged. Turnover was $92.7 million, “Everyone was waiting for direction overnight on quantitative easing, and it met expectations justifying the recent rally,” said Rickey Ward, equities manager for Tyndall Investment Management. “Now the question is ‘where to from here?’, and I think people took the opportunity of the pause to take profits on stocks that have had a good run.”

TrustPower (NZX: TPW ) fell 3.2% to $7.39 after it reported a 28% decline in net profit to $59.7 million for the six months to September 30, from $82.4 million in the previous period.

The company said results in the period were hampered by low spot electricity prices due to high hydro inflows and storage, as well as intense competition for residential customers on the South Island.

Infratil (NZX: IFT ) which owns 50.5%, was unchanged at $1.82.

Fisher & Paykel Healthcare (NZX: FPH ) was off 2.8% at $3.11, Freightways (NZX: FRE ) slipped 2.3% to $3.04, and New Zealand Refining (NZX: NZR ) fell 1.6% to $3.62.

Fletcher Building (NZX: FBU ) fell 1.1% to $8.13. Earlier today the company announced that it had won a contract from the US government to help rebuild American Samoa after last year’s earthquake and tsunami.

The Federal Emergency Management Agency awarded the contract to Fletcher’s 30-year-old Samoan unit to rebuild 33 homes destroyed in the 8.1 magnitude earthquake last year. The quake is estimated to have caused some US$124 million worth of damage.

Smiths City Group (NZX: SCY ) which owns home appliances retailer L.V. Martin & Son, fell 5.3% to 36 cents after second-quarter sales sank 11.5% as the Canterbury earthquake and Southland snowstorms disrupted trading.

The Christchurch-based company said “trading conditions in retail for furniture and appliances are expected to remain difficult” and it’s too early to estimate the impact on profitability.

Smith City lodged a claim with its insurer for lost income at certain stores in Canterbury, which has been accepted in principle, though the amount of cover is still being worked through.

Argosy Property Trust (NAX: APG) rose 2.6% to 80 cents, pacing gainers on the main board of the exchange.

Pyne Gould (NZX: PGC ) rose 2.3% to 44 cents, AMP NZ Office Trust (NZX: ANO ) rose 1.3% to 79 cents, and Kathmandu Holdings (NZX: KMD ) rose 1.1% to $1.77.

Telecom (NZX: TEL ) rose 2.4% to $2.11 ahead of the release of its first quarter results tomorrow.

Vital Healthcare Property Trust (NZX: VHP ) which recently announced the acquisition of 12 medical properties in Australia, rose 1.6% to $1.24. The stock went ex-dividend today.

Xero (NZX: XRO ) rose 3.5% to a record high of $1.78, helped by its announcement that it has added another high-profile IT investor, who will give it about $4 million towards its U.S. expansion.

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