NZ Stocks: Shares tumble on shock retail warning

6:51PM Wednesday May 07, 2008

A chill wind in the retail sector flowed through the broader sharemarket today, closing down a hefty 1.4 per cent.

The NZSX-50 benchmark index fell 54.26 points to 3596.81, adding to a 0.8 per cent fall yesterday. There were 57 falls to 35 rises on moderate turnover worth $113 million.

A mildly positive session on Wall St failed to cheer the New Zealand market, which focused on sports and homeware retailer Briscoe Group.

It was sold off heavily after reporting a 10 per cent fall in same store sales in its first quarter and warning that its first half profit might halve.

Briscoe managing director Rod Duke said he expected other retailers to also post soft quarterly results.

The stock fell 11 per cent or 9 per cent to $1.12, a three year low, on mild turnover.

Peter Sigley, a broker with Goldman Sachs JB Were, said investors were surprised by the rate of the sales slowdown.

"Everybody knows it's tough out there. It's just one demonstation of just how tough it is."

Mr Sigley said Briscoe was very well run but had a history of being a volatile trader.

Other retailers with high exposure to the economy were also tarred with the same brush.

Pumpkin Patch fell 9c to 175, Hallenstein Glassons eased 5c to 355, The Warehouse slid 12c to 564, and gloomy house sales sent Fletcher Building down 23c to 837.

Michael Hill, which is less dependent on New Zealand sales, was flat at 89c.

Blue chips were also down: Contact fell 14c to 906, Telecom was down 12c to 385 and Fisher & Paykel Healthcare lost 8c to 260.

Mr Sigley said Telecom had rebounded of late after slipping below 360 and was now "giving a bit back".

Energy stock NZOG was one of the few stocks to rise, up 3c to 164, while Seeka Kiwifruit jumped 18c to 230 on thin volume. Near-record prices for oil pummelled Air NZ, which closed down 6c to 125.

Sky TV fell 8c to 447, Opus lost 5c to 185, and Provenco fell 5 per cent or 2c to 38 in thin volume after its merger partner Cadmus delisted today.

NZ Refining tumbled 29c to 760, and the worst performer was mining investor Widespread Portfolios, off 13.3 per cent or 0.2c to 1.3c.

Across the Tasman, resource stocks were doing better but banks and financial firms fell on lingering concerns over the health of global credit markets.

At 3.48pm NZT the benchmark S&P/ASX 200 index was down 0.1

per cent to 5,694. Westpac closed down 68c locally to 3000, AMP dropped 45c to 877 and ANZ fell 65c to 2700.

In the US , Wall St rose on Fannie Mae's reassuring comments about the credit and housing markets, while record crude oil prices lifted shares of energy companies.

The Dow Jones industrial average finished up 51.29 points, or 0.40 per cent, at 13,020.83. The Standard & Poor's 500 Index ended up 10.77 points, or 0.77 per cent, at 1,418.26. The Nasdaq Composite Index closed up 19.19 points, or 0.78 per cent, at 2,483.31.

- NZPA

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