Air NZ shares down after buying Virgin Blue stake

Friday 21st January 2011

Air New Zealand shares were down in early trading after the company announced it had paid A$145 million for a 14.9% share in Australian-based airline Virgin Blue.

In early trade today, Air New Zealand (NZX: AIR ) shares were down 4c to 140, after getting to $1.54 - the highest level since March 2008 - on several days earlier this month and in December.

Ebos Group (NZX: EBO ) was also down 4c early, to 736, Nuplex (NZX: NPX ) lost 2c to $3.53, and Trustpower (NZX: TPW ) dropped 2c to $7.22.

The benchmark NZX-50 was up 2.24 points to 3341.53 around 10.15am, having fallen 6.7 points yesterday.

Fletcher Building (NZX: FBU ) gained 3c to $7.82, Port of Tauranga (NZX: POT ) added 5c to $7.50, and Property for Industry (NZX: PFI ) was up 2c to $1.13, while Contact Energy (NZX: CEN ) was unchanged on $6.23 and Telecom (NZX: TEL ) was unchanged on $2.27.

In the US, stocks fell as lacklustre technology and materials companies' earnings failed to live up to heightened expectations, threatening to short-circuit a seven-week rally.

The Dow Jones industrial average dipped 0.02% to end unofficially at 11,823.10, the Standard & Poor's 500 lost 0.1% to 1280.26, and the Nasdaq Composite fell 0.8% to 2704.29.

A day earlier, US stocks had suffered their worst decline in two months as analysts said the market was entering a corrective phase that could drag equities lower in the weeks ahead.

"It's a reaction to companies that aren't performing to the level that people thought they were," said Kim Caughey Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh.

Underscoring how overbought the market has become in recent weeks, stocks failed to react to positive jobs and housing market data that pointed to a strengthening recovery.

NZPA

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