NZ stocks: Telecom, Fletcher Energy nosedive in sparse trading

Telecom, Lion Nathan and Fletcher Energy led the pack yesterday in an otherwise quiet start to 2001 sharemarket trading.

The benchmark NZSE-40 capital index closed down 26.47 points, or 1.39 per cent, at 1875.18, on the back of weak American markets overnight.

Smaller stocks were also down, with the NZSE-SCI capital index shedding 9.44 points to 5074.71.

Rises lagged falls by 34 to 43 among the 126 stocks traded.

Total market turnover of 16.54 million shares was worth $70.54 million. Lion Nathan made up a large chunk of this, topping the NZSE's list of top 10 stocks by turnover with 3.57 million shares valued at $18.14 million changing hands - mostly in pre-market trade.

The stock closed unchanged at $5.09 from Friday's close.

Telecom was chiefly responsible for the overall weakness of the index, falling 24c to $4.57 on turnover of 3.10 million shares valued at $14.41 million.

Telcos had a rough ride globally overnight and Telecom mirrored this trend in local markets yesterday, said Credit Suisse First Boston dealer David Price.

"The markets offshore have been very harsh on telcos. The Nasdaq was down 7 per cent overnight and tech stocks, telcos and media have been suffering relatively badly.

"People are still heading towards the old-economy stocks - not to say that Telecom is a new-economy stock - but that is the trend at the moment. People are heading a bit more towards safety," he said.

Fletcher Energy also slumped, closing down 39c at $8.16 on the back of weakness in its American turbine interest Capstone and a strong start to the year for the New Zealand dollar.

Capstone shed almost 15 per cent in New York on Tuesday, while the kiwi raced away to five-month highs in its first day of new year trade.

Mr Price said the overall market was very quiet, with many investors on holiday. He expected trade to remain light for the rest of the week.

"There aren't a lot of people around. With full participation next week you will start to see the volumes increase."

Among the leaders, Auckland Airport fell 4c to $3.10, Carter Holt eased 1c to $1.63 and Contact Energy gained 1c to $2.66.

- NZPA