NZ Stocks: Equities end down after wild gyrations

The sharemarket ended down yesterday after movements in Telecom caused it to gyrate wildly between positive and negative territory.

The NZSE-40 index closed down 6.94 points, or 0.34 per cent, at 2030.39, after the bubble burst on index buying in Telecom that had seen the stock rally as high as $6.10 earlier in the day.

Australian institutions moved to fill orders ahead of Telecom's listing on the Australian exchange, creating an artificial high which, once over, brought the stock quickly back to earth, Deutsche Bank's Shane Gavegan said.

Telecom closed down 12c at $5.77.

The local bourse was relatively unfazed by GDP data showing the New Zealand economy grew by 0.5 per cent in the December quarter, below economists' expectations of 0.8 per cent.

"You might see a little bit more of that GDP figure coming through on Monday," Mr Gavegan said.

Investors appeared to be treading cautiously after stocks in the US slipped overnight.

Carter Holt Harvey was one local stock to fall victim to Wall St's bearish sentiment after its majority shareholder, International Paper - the world's largest paper and forest-products company - became the latest top-name company to warn that its earnings would fall well below Wall St estimates because of the slowing US economy.

IP dropped $US1.11 to $US35.11, sending Carters down 3c to $1.70.

Air New Zealand continued its downward slide after analysts estimated losses at Ansett Australia could blow out to $A170 million this year, resulting in a loss of $75 million to $100 million for Air New Zealand.

This follows Thursday's statement by Air NZ chairman Sir Selwyn Cushing that the Australian airline would drag the New Zealand airline into a "substantial operating loss." Air NZ has conceded it paid too much for Ansett Australia.

Air NZ A shares closed down 5c at $1.03.

Biotechnology company Genesis closed down 24c at $3.56 after the company's top brass spent most of Thursday's annual meeting reassuring shareholders that their company is in rude health, despite its slumping share price.

The New Zealand dollar was poised to follow the aussie down over the weekend as sentiment continued to sour on its Australian cousin.

The kiwi closed at 40.35USc, while the aussie perched above a record low as it traded at 49USc.

The aussie's all time low was 48.88USc set on March 26, while the kiwi's nadir was 38.97USc in October.

Derek Rankin of Greenwich Financial Services said the kiwi hit a low of 40.21USc on the release of worse than expected GDP data.

Economists are now picking more interest rate cuts from the Reserve Bank.

- NZPA