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NZ sharemarket sags even though budget well received

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, May 20 NZPA - The New Zealand sharemarket failed to get a lift from a well received government budget and slipped for a fifth successive session as offshore markets continued to weaken.

The benchmark NZX-50 index closed down 10.46 points, or 0.335 percent, at 3111.415. Turnover was worth $104.4 million. There were 42 rises and 42 falls among the 111 stocks traded.

The New Zealand dollar rose, particularly against the Australian dollar, in reaction to the budget, which forecast an earlier return to surpluses but made property investment less attractive from a tax perspective.

Listed property trusts were mixed as they benefited from a reduction in tax on portfolio investment entities to 28 percent from 30 percent, but suffered from the removal of depreciation on buildings.

"It seems to have been taken into account and property trust prices have been weak in past couple of weeks," said Grant Williams, director at Hamilton, Hindin, Greene.

"There has not really been much of a response from the market to the budget even though most analysts are saying it is pretty positive," he said.

AMP Office Trust rose 1c to 73, ING Medical Property Trust rose 2c to 123 and ING Property Trust fell 1c to 73. Property for Industry rose 4c to 117 and Goodman Property Trust rose 2c to 97.

Kiwi Income Property Trust, which this morning announced a $12.4 million full year loss, compared with a net loss of $169m last year, was down 1c to 95.

Telecom was unchanged at 205, Fletcher Building fell 6c to 806 and Contact Energy rose 3c to 604.

Nuplex rose 1c to 314 after initially be down 7c. NZOG fell 4c to 141, Tower rose 1c to 192 and Infratil rose 2c to 169.

Freightways fell 2c to 313 and Mainfreight rose 1c to 624. NZX fell 1c to 170.

Meanwhile, in overseas markets US stocks fell yesterday as Germany's unilateral action to ban specific trades on some stocks and bonds sparked a fresh wave of uncertainty and risk aversion among anxious investors.

The Dow Jones industrial average slid 66.58 points, or 0.63 percent, to 10,444.37. The Standard & Poor's 500 Index fell 5.75 points, or 0.51 percent, to 1115.05. The Nasdaq Composite Index lost 18.89 points, or 0.82 percent, to 2298.37.

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