NZ stocks: Telecom again drags market down

12:00 pm

After a great start to the year, Telecom was again a drag on the market as it retreated further today.

The market was negatively influenced by Wall Street which, after opening weakly, tanked badly at the close.

The Dow plunged 210 points, 2.1 per cent, and the Nasdaq dropped 56 points, or 2.8 per cent.

"I wouldn't be surprised to see the market tail off a bit more today," Forsyth Barr Frater Williams broker Alan Wills said.

Telecom fell 9c to 516 on solid turnover worth $7.7 million. While the stock is still ahead of its 500c start for the year, it has dropped well down from a high of 549 touched on Friday.

The NZSE-40 capital index was off 13.63 points at 2083.44 shortly after 10am on modest overall volume of $3.8 million.

Mr Wills said that in the US people had become over-excited about the prospects of economic recovery.

"As time goes on people are realising that the timing and extent of the recovery will be pushed out further."

He said the market was concerned about the extent of the damage caused to profits in the December quarter and whether they match pre-result profit warnings.

A number of stocks had had a very strong run here, and Mr Wills said it would not be a bad thing if they took a breather.

Among those to pull back today were: Auckland Airport, 3c to 382, Baycorp Advantage, 5c to 740, Fisher & Paykel Appliances, 5c to 1085, Northport, 8c to 232, and The Warehouse 1c to 680, Carter Holt, 1c to 176, Natural Gas Corp, 3c to 123, and Fletcher Building, 2c to 292.

The Eric Watson-controlled Pacific Retail Group (PRG) said today it had an option to buy a further 3.55 per cent of lingerie manufacturer Bendon, which would lift its stake to just under 20 per cent after it bought 15.5 per cent yesterday.

PRG was unchanged on 210 while Bendon was also unchanged at 192 - the same price as the option.

Investment company Hellaby Holdings was 1c up at 235 after it gave notice that from January 22 it would begin a buyback of up to two million ordinary shares comprising 4 per cent of issued capital.

In all there were 13 rises and 25 falls among the 77 stocks traded.

- NZPA