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NZ Sharemarket Slips Along With Offshore Markets

Fuseworks Media
Fuseworks Media

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Wellington, June 17 NZPA - The New Zealand sharemarket slipped on a day with little corporate news to trade on and reflecting a pause in global equity markets on doubts about an economic recovery.

The benchmark NZX-50 index closed down 8.115 points, or 0.291 percent, at 2778.039, having fallen 39 points yesterday. Turnover was worth $97 million. There were 39 rises and 44 falls among the 110 stocks traded.

US stocks slipped on Tuesday on mixed economic data and worries that retailers are not reflecting the much talked about green shoots of economic recovery.

After a three-month run that lifted the S&P 500 as much as 40 percent from 12-year lows, analysts are now looking for evidence of recovery to support the optimism.

"People are starting to hold back. It has been a phenomenal rally," said James Porteous, manager at ABN Amro Craigs.

The focus continues to be on large capital raisings in Australia. While locally companies are not saying much ahead of their June 30 year-end.

Reserve Bank Governor Alan Bollard also reminded investors today that a tightening of monetary conditions care of a higher New Zealand dollar and higher interest rates threatens an economic recovery.

Top stock Telecom was up 2c to 259, after losing 5c yesterday, while Fletcher Building dropped 24c to 636 after losing 18c yesterday. Contact Energy rose 8c to 580.

Air NZ slipped 3c to 98, after reporting a 9.9 percent fall in passenger numbers last month from a year earlier, although capacity cuts meant the group's load factor rose by 2.2 percentage points.

Hellaby rose 8c to 114 and Mainfreight rose 7c to 420.

NZX fell 19c to 755 and Auckland Airport fell 1c to 154.

Sanford rose 1c to 551 and TrustPower rose 5c to 791. Methven fell 3c to 135 and The Warehouse fell 2c to 372. Lion Nathan fell 7c to 1440 and Fisher & Paykel Healthcare rose 3c to 295.

In the US, a rebound in May housing starts was one positive, but another government report showed industrial production had a steeper-than-expected 1.1 percent slide last month.

"The market's taking a breather and may be starting a meaningful correction," said Hugh Johnson, chief investment officer of Johnson Illington Advisors in Albany, New York, concerning the market's losses.

Best Buy Co Inc, the largest US consumer electronics retailer, posted weaker-than-expected sales in its first quarter and suggested earnings for the rest of the year would be worse than forecast. Its shares dropped 7.3 percent.

Indexes ended at session lows. The Dow Jones industrial average fell 107.46 points, or 1.25 percent, to 8504.67. The Standard & Poor's 500 Index lost 11.75 points, or 1.27 percent, to 911.97. The Nasdaq Composite Index was off 20.20 points, or 1.11 percent, to 1796.18.

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