Shares fall from record highs

By NZPA

Friday 11th May 2007

The sharemarket shook off recent merger-driven fever, as Fletcher Building shares paused for breath and Wall Street experienced a sharp fall.

The benchmark NZSX-50 index fell 0.58% or 25 points to 4226.38 on turnover of $129 million, cooling from three straight record closes.

Number two stock Fletcher Building fell back 32c to $11.57, having briefly hit a record high of $12.01 yesterday.

"It's had a pretty good run," First NZ Capital broker Don Lewthwaite said of the company which is now expected to nudge $500m in full year earnings.

The index's top stock, Telecom, remained moribund at $4.86 after a flurry of offshore buying yesterday boosted the stock by 11c.

Electricity company Trustpower surged 20c to $8.40, after posting a 20% rise in annual net profit yesterday.

But Contact Energy, which has lagged the market in recent weeks, dropped another 8c to $8.65.

Tech stock darling Rakon rose 5c to $4.83 on good volume and "ongoing bullishness".

The Warehouse limped up 2c to $6.77 even though it announced solid third quarter sales figures today.

New Zealand's biggest retailer reported a 6.7% increase in third quarter sales to $412.3 million on the same period a year ago.

"The figures were slightly better than the market was expecting but the stock is obviously priced on its potential for corporate activity rather than its ongoing trading business."

Earlier this week Hallenstein Glasson and Briscoe also reported a rise in April quarter sales, although Hallenstein lost 5c to $5.05 today.

Other stocks on the downside included Sky TV, down 15c to $5.90, Hellaby Holdings down 7c to $4.17, and Cavalier Carpets down 13c to $3.22.

Among the smaller stocks, Turners Auctions lost 5c to $1.30 but it was a relatively muted reaction to news that a former employee was being investigated by the Serious Fraud Office over a potential fraud of at least $1 million.

Genesis Research was the best performer, albeit on small volume, up 11% or 3c to 30c.

Shares in NZ Windfarms fell 25c to $1.87 after yesterday's 19c rise on confirmation of its $75 million share issue, while Windflow Technology which is making Windfarms' turbines was flat at $3.25.

Overall, falls outnumbered rises 63 to 36 on 150 stocks traded.

Across the Tasman, Australian shares slipped 0.9% on renewed worries about the health of the US economy, and as talk of a bid for Rio Tinto subsided.

By 4.57pm NZT the benchmark S&P/ASX 200 index was down 59.1 points to 6296.4 after record highs in the past two sessions.

In the US, stocks slumped in their steepest fall in two months as disappointing retail sales and a widening trade deficit aroused worries about the economy.

The Dow Jones industrial average fell 147.74 points, or 1.11%, to 13,215.13. The Nasdaq Composite Index fell 42.60 points, or 1.65%, to 2533.74.

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