NZX50 runs out of puff
The benchmark NZX50 index dropped below 4000 points this afternoon as the market took a festive season breather.
At about 4.30pm, the index had dropped 30 points, or 0.74%, to sit at 3996 points.
Craigs Investment Partners director Nigel Scott says some stocks have rallied aggressively in the year's final quarter and investors seem to be looking at valuations.
"With certain stocks, there is a bit of moderate profit-taking or taking a breather.
"Also, you've got to look across at the Australian commentary on their economy and a lot of these stocks have exposure to Australia."
The time of year might have something to do with the lull, he says.
"People are starting to close up. They've had a great gain in this last quarter which has been a tad surprising and people like to lock in a few profits."
"It's hard to see additional value opening up here ahead of Christmas."
The index broke through the 4000 points barrier on November 21, for the first time since June 2007. It has bobbed above 4000 points for 14 trading days but has not reached its 2007 peak of 4200 points.
By 4pm, Telecom was down 4 cents on trade worth more than $27 million.
Contact Energy (NZX: CEN), which has also rallied in recent weeks, is down 2.11% to $5.10.
Mr Scott says a couple of months ago the market was relatively short on investment opportunities.
Since then Fonterra launched its $525 million investment fund and Moa Group debuted with its oversubscribed $15 million IPO.
In other investment moves, Steel & Tube's former owner Arrium sold its 50.3% stake, Goodman Property Trust mopped up the remaining interest in Highbrook Business Park, the Todd family sold its 11.1% of Sky Network Television and A2 Corporation had a $90 million capital raising.
Also, Kiwibank, Christchurch Airport, Auckland Airport and ASB have issued bonds.
"The issuance has met the liquidity angle on the market," Mr Scott says.
It has been another drag on the market, Mr Scott says, losing 20% of its value since November 30's high of $3.40. It is unchanged today on $2.72.