NZ stocks: F&P surges as Telecom takes a dive

A big slump in Telecom's share price contributed to an almost 1 per cent drop on the sharemarket, which had little direction from overseas.

The NZSE-40 slumped 17.6 points to 2003.36 on a healthy volume of $95.3 million worth of shares.

Both the US and Japanese markets were closed yesterday for public holidays.

While precarious global markets still appeared to be high in the minds of investors, Greenslades broker David Fergusson said the return to healthier volumes was a welcome sign after six months of turnover around the $40 million to $50 million level.

"It's good to see that the market's still having very good volume days - it indicates people aren't sitting on their hands waiting for things to happen, but it's all very cautious.

"We're well above the 2000 mark ... I think that's an indication of a market that's settling down, really, and just looking for a bit more direction from overseas markets ... "

Fisher & Paykel Healthcare was again the star of trading, ending up 40c to $16.80 on exceptional turnover of $38.1 million.

Mr Fergusson said the New Zealand movement was underpinned by big orders on the Nasdaq overnight.

The volatile stock was "still trying to find its feet" after listing in New Zealand and the US last week and Australia this week. It plunged a dollar to $14.50 on Monday, but some analysts believe it could eventually level out at $17.

By contrast, there was a lot of profit-taking in market leader Telecom, which tumbled 14c to $4.78. The US-listed stock was heavily traded in America the night before and brokers said there could be residual concern about last week's merger announcement by its competitors TelstraSaturn and Clear. Australian-based Telstra traded up 14c to $6.69.

Takeover targets Contact and Frucor both traded on light volumes after their respective suitors extended their offer deadlines this week.

Contact was up 3c to $3.96, still well below Edison Mission's offer of $4.14 (plus an 11c Contact dividend), as shareholders continued to play hard to get.

Frucor drifted down 2c to $2.35, the same price as Groupe Danone's offer. Observers said the key would be whether shareholders let the price fall lower, indicating a definite lack of interest in parting with their shares.

Other stocks to fall included Carter Holt Harvey, down 2c to $1.59, and Tranz Rail, down 6c to $4.20. INL was down 10c to $3.60 and one of its interests, Sky TV, fell 19c to $3.46 on low volumes.

Rises included Lion Nathan, 4c to $5.40, F&P Appliances, 4c to $8.70, Trustpower, 5c to $3.35, UnitedNetworks, 5c to $8.05, and The Warehouse, 2c to $6.40.

* The kiwi had little to give thanks for yesterday with very little happening on the New Zealand currency market.

"Obviously the New York holiday [Thanksgiving] is having an effect on limited volumes going through," one dealer said.

"Basically we just followed the aussie around."

- NZPA