NZ stocks: Telecom drop forces investors to sit tight

A quiet sharemarket was pulled down yet again by Telecom as investors expressed doubts in the top stock.

Yesterday's concession speech by United States Vice-President Al Gore had no effect on the sharemarket or the currency, although the New Zealand market is waiting to see how the American markets react to George W. Bush.

Telecom dropped 17c to $5.30, on light turnover of just under 3 million stocks.

Cameron Stewart, of ABN Amro, said there was some speculation that Telecom would not return to the Australian Stock Exchange indices today. Telecom fell off the ASX this year and a decision on the firm being reinstated is due any day.

"It's near two-month lows. People are sitting on the sidelines," Mr Stewart said.

"The day was a classic example where there just wasn't enough liquidity, and that's the concern of a lot of people in the Australian market.

"At this stage we've been looking at it and we don't think it [Telecom] will be included," he said.

This month, Japanese telco NTT DoCoMo seemed to cool on the idea of a partnership with Telecom to buy the cellphone assets of Australian company Cable & Wireless Optus.

"DoCoMo has signalled it is still sort of interested ... but it doesn't look like they'll go into partnership together," said Mr Stewart.

"That sounded like a good growth opportunity for Telecom into Australia, and people were probably punting on that earlier when the stock was running up to $6."

Telstra shed 2c to $8.40. Fletcher Energy was down 3c in early trading after US asset Capstone Turbines lost more than $US2 overnight, but ended yesterday up 1c at $8.74. Building was down 1c at $1.93 on healthy volume of 3.21 million shares traded. Forests was unchanged at 28c.

Air New Zealand B shares were down 4c at $1.60, while A shares shed 1c to $1.32. Contact Energy lost 5c to $2.82, UnitedNetworks was down 4c at $8.01, TrustPower lost 4c to $3, and The Warehouse was down 3c at $5.70.

Port of Tauranga was down 5c at $5.65, Auckland Airport lost 5c at $3.14 and Tower shed 20c at $5.10.

- NZPA