NZ stocks: Market holds ground as Telecom strengthens

The New Zealand sharemarket held its ground, led by strong trading on Telecom today, after European markets and to a lesser extent, Wall St, were pounded overnight.

The NZSE-40 Capital Index closed down 4.63 points, or 0.23 per cent, at 1987.48 on turnover worth $102.37 million.

Andrew Kelleher of ASB Securities said it had been another good volume day, with much of the trading being on Telecom.

The market leader rose 3 cents to 495 as 12.18 shares worth $59.83 million changed hands.

"Telecom's performance has been quite pleasin g."

There had been a lot of speculation about the overhang in the market and Telecom's prospects, but a slightly clearer picture was emerging, Mr Kelleher said.

"The overhang has gone and the stock seems to be quite comfortable at the $5 mark - the test is whether it can push through there."

Despite the feel-good sentiment surrounding Telecom, global telecommunication weakness and skittish foreign markets still threatened the stock, Mr Kelleher said.

US and European stocks last night crashed to multi-year lows to end the September quarter on a dismal note.

The Dow Jones industrial average fell 109.52 points, or 1.42 percent, to 7591.93 while the Nasdaq Composite Index was down 27.23 points, or 2.27 percent, at 1171.93 - its lowest close since 1996.

The Dow sank more than 12 percent in September to finish off its biggest quarterly decline since the fourth quarter of 1987, when the stock market suffered its last major crash.

European markets had an even rougher day as investors took fright at deteriorating prospects for the global economy, bleak corporate outlooks and the threat of war in Iraq.

The sell-off was broad-based - only 35 of Europe's 300 top listed companies managed a gain.

The FTSE Eurotop 300 index closed down 4.8 percent to 818. The index lost 14.5 percent in the third quarter and has now fallen 46.7 percent so far this year.

French stocks were pounded to five-year lows and the broad-based rout handed the benchmark CAC-40 index its largest one-day percentage fall since the US attacks on September 11, 2001 - down 5.87 percent.

Mr Kelleher said there "were some fairly negative commentaries running around about the US markets now, and last quarter was a terrible quarter again".

But the reaction of New Zealand markets was typically moderate.

The Top Ten was virtually unchanged today, with ups and downs cancelling each other out.

Lyttelton Port was down 11c to 145 following the announcement that it had missed out on a majoring shipping contract with P&O Nedlloyd.

The stock is at two year low, having plummeted 15 percent in the past two weeks.

Port of Tauranga, which also missed out on the shipping deal, slipped 10c to 830.

Sanford, which issued a statement that it was closing its Nelson fisheries plant, climbed 9c to 490.

The Warehouse fell 10c to 705 on trading worth $2.14 million, and fellow retailer Briscoes shed 4c to 244.

Mr Kelleher said there would be concern if The Warehouse dropped below the psychological $7 mark.

Other significant falls were Baycorp Advantage, down 11c to 354, Auckland Airport, down 5c to 435, and Fisher Appliances, down 30c to 985.

Falls outweighed rises 58 to 35 on 128 stocks traded.

- NZPA