NZ stocks: Market down as firms go ex div, Air NZ dives again

12.30 PM

The sharemarket fell 1.3 per cent this morning, much of that the result of companies going ex dividend, although renewed selling of Air New Zealand continued to drag the market down.

The weakness followed Wall Street's worst week since the Great Depression after it reopened last week in the wake of the terrorist attacks on New York and Washington DC.

US stocks slumped on Friday, with blue chips slumping on growing fears over a worsening US economy and a long war on terrorism after last week's deadly attacks.

The Dow Jones industrial average skidded a record 1370 points for the week, and its weekly per centage loss eclipsed the slides of the October crashes of 1987 and 1929. The New York Stock Exchange clocked its three busiest days ever on Monday, Wednesday and Friday since it reopened after a four-day shutdown caused by the September 11 terrorist assaults.

On Friday the Dow plunged 140.40 points, or 1.68 per cent, to close at 8,235.81, after initially dropping more than 3 per cent. The technology-laced Nasdaq Composite Index tumbled 47.74 points, or 3.25 per cent, to 1,423.19.

By late morning the NZSE-40 index was down 24.95 points to 1781.62, due in no small part to companies going ex-dividend.

Sky City was down 50c to 1005 after shedding a 35c dividend, Fisher & Paykel was down 80c to 1140 on an 45c div, and NZ Refining was ex a 50c div. Australian stocks Goodman Fielder and Telstra were down 6c to 155 and 25c to 620, both ex div.

Air NZ plunged to new record lows as speculation mounted the company would be placed in statutory management. Earlier this morning the unrestricted B shares dropped 11c to just 15 but by late morning had recovered to 22. The resident-only A shares fell 11c to 18c, then edged back to 23.

"Clearly the articles in papers continue to unnerve markets," said ABN Amro broker Nigel Scott. "Some of the punters from last week are turning around and wondering just what does statutory management mean."

He said such action would possibly help market sentiment as it would give some certainty. Air New Zealand was already largely written off as far as most institutions were concerned.

"People have largely priced that (statutory management) in to tell you the truth," he said. "People would be more confident of survival and go and book on the planes. I think it would help the situation."

Turnover value was inflated to $38.7 million by several large pre-market crossings.

"The market looks worse than what it is with stocks going ex dividend," said Mr Scott.

He said buyers were likely to hold out early on to assess the situation.

"Nervousness still prevails and choppy trading," he said.

The market would be swayed by corporate statements on value losses or such things as statistics on tourism.

New Zealanders were generally net buyers of shares and had largely decoupled from Wall Street, he added.

Market leader Telecom fell 6c to 450, while 30 per cent Air NZ stakeholder Brierley was down 3c to 26. Other stocks to fall included Baycorp down 5c to 1000, Contact was down 6c to 325, Tasman Agriculture down 8c to 167, and the Warehouse down 3c to 580.

There were 11 rises and 49 falls on 104 stocks traded.

- NZPA