NZ Stocks: Stocks slump in line with overseas falls

The sharemarket headed down during a nervous day yesterday as investors eyed dropping overseas markets.

The NZSE top-40 Capital Index was down 1.51 per cent, or 29.48 points, at 1918.96.

Shane Gavegan of Deutsche Securities said volume was heavy in the three Fletcher stocks but reasonably light throughout the rest of the top stocks.

Total turnover was $175.92 million on 45.84 million stocks traded, of which Fletcher Energy made up $94.43 million.

Fletcher Forests closed down 7c at 43, near its all-time low of 40c reached in October 1998, while Building was down 10c at 195. Energy was up 6c at 930, above the 920 mark that some analysts considered a reasonable valuation.

"Energy came off its high of 942, I think buying just ran out in the afternoon," Mr Gavegan said.

"There's still a belief that the [Shell] deal will go through with the Commerce Commission on Friday, so you're just seeing some more buying coming into the market leading up to that announcement," he said.

"Investors don't really like the idea of a rights issue [in Forests] so it continues to get sold - there were 11 million shares traded. So there are people on the other side that believe there is value, but the rights issue was unexpected in many respects." he said.

Disappointed Building investors who had anticipated a sale of the division also continued selling their shares.

Telecom slumped 25c to 535 after a weak start, as buying became more aggressive late in the afternoon.

"There was a weakness in the US, particularly in the Nasdaq. It didn't help when [telecommunications equipment maker] Lucent came out with a fourth-quarter profit warning Mr Gavegan said.

Joining the slide down were Tranz Rail, which lost 21c to 364, Genesis, 15c to 650, Owens, 10c at 85, and SkyTV, 8c at 330.

AMP lost 65c to $21.65, Telstra was down 26c at 774, and the instalment receipts shed 30c to 370.

On the up were the Port of Tauranga, 10c to 550, Ports of Auckland, 5c at 385, and The Warehouse , 12c to 575. Tower gained 5c to 470 and Contact rose 3c to 263.

Falls outnumbered rises by 73 to 31 on 145 stocks traded.

- NZPA