NZ stocks: NZSE-40 dips below 2000

12.00pm

The NZSE-40 capital index dipped below 2000 this morning with falling prices on overseas markets hitting some New Zealand stocks hard.

Fund manager AMP's shares slumped 47c to a fresh low of 1285, on top of yesterday's 3.3 per cent slide, before recovering some ground rising to 1307 at 11.30am.

AMP had continued its decline until trading was halted about 9.30am, prior to a surprise announcement that chief executive Paul Batchelor was stepping down.

Following the plunge of the London's FTSE-100 index last night, there are fears Australasia's biggest fund manager will have to pump in more capital to its UK Pearl unit to add to the £500 million ($1.67 billion) it announced late on Friday it was putting in.

In its Friday's statement, AMP said that if the FTSE benchmark fell below 3700, it would consider providing more funds to Pearl. Mr Batchelor's shock resignation came as doubts deepened about capitalisation of Pearl.

The NZSE-40 capital index had fallen 9.44 points to 1997.49 by 11am on light trading worth $11.64 million. The benchmark index last closed below 2000 on August 9.

On Wall Street, a slew of dour corporate forecasts amid fears about a possible war with Iraq sent stocks tumbling yesterday, yanking the Nasdaq down to its lowest level since 1996 and extending the longest bear market stocks have seen in 60 years.

London's FTSE-100 index dropped 3.1 per cent to a six-year low.

ABN Amro Craigs retail equities adviser Nigel Scott said overseas events were hitting the market hard.

Market leader Telecom fell 3c to 476, and discount retailer The Warehouse was down 4 to 720.

Sky TV was down 6 to 354 after suggestions that Telecom may sell its 12 per cent stake. "The markets are basically in wait mode to see if Telecom will sell their stakes," Mr Scott said.

Other stocks to fall were: WestpacTrust, down 19c to 1660; ANZ Bank Group, down 15c to 2190; and Sky City, down 5c to 705.

Natural Gas Holdings firmed 3c to 141 to an 18-month high after announcing yesterday that it was selling its gas retailing operations to state-owned Genesis Power.

Mr Scott said that Natural Gas appeared to be attracting some of the money released by Vector's takeover off of fellow utility UnitedNetworks.

Yesterday, UnitedNetworks shareholders were advised by independent directors and valuation firm Grant Samuel to accept Vector's 990 a share takeover offer.

Currently publicly owned, the trust that controls Vector is planning to float 25 per cent of the newly merged company.

UnitedNetworks shares were unchanged at 982.

There were 14 rises and 45 falls on 107 stocks traded so far.

- NZPA