Market shrugs off Shanghai plunge, profit warnings

By NZPA

Tuesday 5th June 2007

The sharemarket recovered from a weak start today, as gains in domestic-focused stocks offset profit warnings and concerns about the high currency and interest rates.

Local shares shrugged off a nearly 6% plunge on China's main stock index today, before clawing back some ground.

Having softened in early trading amid prospects of a Reserve Bank interest rate rise on Thursday, the NZSX-50 index closed up 15.68 points at 4312.11. Turnover of 45.78 million shares was worth $173 million.

Stocks on the decline edged those on the rise 58 to 55 among the 158 stocks traded.

"Defensive, local stocks have obviously generally speaking underpinned our market," said ASB Securities' Stephen Wright, noting trading had been mixed.

Contact Energy led the way with a 20c gain to $9.05.

Exporters were hit by the New Zealand dollar, with the currency hitting a post-float high today just below US75c.

Fisher & Paykel Healthcare was down 3c at $3.47, F&P Appliances fell 12c to $3.83, and Pumpkin Patch fell 15c to a seven-month low of $4.05.

Top stock Telecom was flat at $4.80.

Nuplex closed down 15c at $7.15 after it said it was closing a Brazilian factory that would cut $3m of annual losses, but it would cost $3.5m.

Rubber goods manufacturer Skellerup slumped 12c to a two-year low of $1.11, after forecasting a $7m loss due to one-off costs and said it was battling the currency and a slowdown in trading.

Sky TV was up 15c to $5.75, the stock benefiting from the high NZ dollar as it buys programmes in US dollars.

NZ Exchange continued its record-breaking run, rising 20c to $11.70. The company released figures showing a decline in income and turnover in May against last year's record performance. Daily turnover averaged $165m, healthy but down 17% on May 2006.

Debutant Xero closed steady at $1.10, having opened at $1.11, an 11% premium to its issue price.

The Warehouse fell 5c to $6.25 after speculation on Friday that the Commerce Commission looked set to decline takeover applications from Woolworths and Foodstuffs.

Air New Zealand eased a cent to $3.09 after soaring 13c to a five-year high on Friday, Auckland Airport rose 4c to $2.72, and takeover target Tourism Holdings lost 4c to $2.76.

Among dual-listed stocks, Goodman Fielder fell 13c to $2.70, Lion Nathan lost 10c to $10.45, ANZ rose 10c to $32.70, Westpac was up 5c at $29.30, and AMP was flat at $11.30.

Australia's benchmark index fell 0.3% to 6374.1, and Japan's Nikkei rose 0.2%, ignoring the fall in China's main stock index.

Earlier in the US, stocks rose with the Dow and the S&P 500 eking out closing records, as higher energy shares and a fresh round of takeovers offset concerns about a sharp sell-off in Chinese stocks.

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