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.

Dragged down

Telecom (NZX: TEL) is dragging down the index today after its twin broadband blackouts this week.

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.

SKYCITY (NZX: SKC) has dropped 0.55% on trade worth almost $18 million and Fletcher Building (NZX: FBU) fell 1.66% to $8.31.

Rises include Pumpkin Patch (NZX: PPL), up 8.2% and A2 Corporation (NZX: ATM), up 6%.

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.

Chorus (NZX: CNU), the telecommunications network company spun out of Telecom last year, has been sliding on news of a Commerce Commission regulation threat.

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.

dwilliams@nbr.co.nz


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NZ Market Snapshot

Forex

Sym Price Change
USD 0.7113 0.0000 0.00%
AUD 0.9508 0.0000 0.00%
EUR 0.6400 0.0000 0.00%
GBP 0.5202 0.0000 0.00%
HKD 5.5327 0.0000 0.00%
JPY 72.5690 0.0000 0.00%

Commods

Commodity Price Change Time
Gold Index 1322.4 67.410 2016-06-24T00:
Oil Brent 49.0 -2.570 2016-06-24T00:
Oil Nymex 47.6 -2.510 2016-06-24T00:
Silver Index 17.8 0.440 2016-06-24T00:

Indices

Symbol Open High Last %
NZX 50 6821.4 6853.1 6821.4 -2.25%
NASDAQ 4715.8 4798.2 4910.0 -4.12%
DAX 9237.6 9720.1 10257.0 -6.82%
DJI 17946.6 17946.6 18011.1 -3.39%
FTSE 6338.1 6338.6 6338.1 -3.15%
HKSE 20483.5 21034.2 20868.3 -2.92%
NI225 16333.9 16389.2 16238.4 -7.92%
ASX 5280.7 5325.4 5280.7 -3.17%