NZ Stocks: Profit-takers hit Telecom, FCL Energy

The sharemarket started the week down almost 1 per cent on Telecom and Fletcher Energy weakness as stronger overseas markets on Friday and again in Australia yesterday failed to inspire it.

The NZSE-40 capital index closed off 18.58 points at 1961.90, despite rises outnumbering falls 51 to 39 among the 152 stocks traded.

But smaller stocks firmed, and the NZSE-SCI capital index rose 18.30 points to 5059.56.

Telecom and Fletcher Forests led turnover, the former seeing 7.43 million shares worth $44.18 million traded and the latter 10.05 million shares worth $3.82 million. Total market turnover was $104.77 million on 36.33 million shares.

Telecom fell 11c to 587 and Fletcher Energy lost 16c to 833.

"I think it's just on profit-taking after some good improvements last week," said Grant Williamson of Hamilton, Hindin, Greene.

Last week, the top-40 index had gained 1 per cent, with Telecom and Fletcher Energy making a significant contribution. That meant the index had lifted more than 6 per cent since its latest low of 1861 a fortnight ago.

"With the exception of Fletcher Forests and Telecom, there was very light volume in the majority of stocks so the market was probably just lacking a bit of buying interest, which can quite often happen on a Monday," said Mr Williamson.

Among issues surrounding Telecom at the moment is a reportedly possible purchase of mobile phone assets of Australian telco Cable & Wireless Optus.

Last week, Standard and Poor's said Telecom would put its A-plus credit rating at risk if it tried to undertake a major acquisition without first restructuring its balance sheet.

Telecom said of its latest big spend-up that it had all but completed the full acquisition of AAPT.

On Fletcher Energy, Mr Williamson noted continued apprehension about the Commerce Commission's upcoming decision on whether it will clear Royal Dutch Shell to buy it.

This is the second time Shell has sought clearance, and if it fails court action is tipped.

Elsewhere in the Fletcher camp, Forests gained 1c to 38 while Fletcher Building fell 14c to 182 after going ex an 8c dividend.

Insurers had a good day with AMP up 16c at $22.96, Axa up 6c to 382 and Tower up 9c to 499.

"There just seems to be a bit of a re-rating in that whole sector at the moment," said Mr Williamson.

Among other rises, Sanford gained 10c to 480, Ports of Tauranga added 8c to 538 and Nufarm closed up 5c at 400.

Of those to fall, Air New Zealand domestic A shares lost 5c to 167 and the foreign B shares dropped 8c to 240, The Warehouse slipped 10c to 620 and ANZ banking group lost 35c at $18.25.

On Wall St, blue-chip stocks closed sharply higher on Friday, the financial sector leading the way after unexpectedly soft United States economic growth numbers heightened hopes that interest rates might have peaked.

- NZPA