NZ stocks: Telecom, Lion keep stocks on even keel

The New Zealand sharemarket eased a little yesterday after a turbulent session on Wall St had threatened to push it back heavily.

The NZSE-40 capital index shed just under 6.46 points to 1989.91, while the small companies' index fell 14.42 to 5138.63.

"Telecom and Lion Nathan held it together, but the rest of the market was a bit ordinary," said Ord Minnett's head of institutional investment, John Rattray.

There was solid turnover on the local market of $145.6 million, with $52 million traded in Telecom and $46.6 million in Fletcher Energy. Energy fell 2c to $9.08, while its US investment, Capstone, shed another couple of dollars to $US24.60.

Telecom closed 7c ahead at $5.82, with speculation that it is nearing an announcement on its reinvention spurring the buying.

"I don't know why Telecom are holding as well as they are, but there are all sorts of suggestions that they are on the cusp of big changes in its structure," said Mr Rattray.

Lion Nathan continued its strong run since its move to Australia, rising another 10c to $5.75. It said it had gone through the formality of obtaining full clearance to buy Montana but was keeping its options open.

Montana rose 5c to $3.55.

More than 17 million Fletcher Forests rights were traded but they fell 0.4c to 1.9c. The head shares fell another 1c to 26c, just 1c above the price that rights holders will have to pay to convert their shares.

Plenty of other stocks had a poor day. The Warehouse, after running strongly into its courtesy Australian listing, fell back 15c to $6.45 as it faced a typical lack of interest from Australian investors.

Carter Holt Harvey fell 3c to $1.78.

Air New Zealand 'A' shares dropped 1c to $1.47 following the airline's rating downgrade by Standard and Poor's. The B shares fell 10c to $1.85. CS First Boston broker David Price said the effect of the ratings slide could be short term with the announcement overnight that Equant was to be purchased by France Telecom. This would give Air NZ a $50 million abnormal gain from its Equant holding.

Auckland Airport fell 11c to $2.89 despite telling forecasting at its annual meeting that its current-year profit should rise 10 per cent.

Mainfreight fell 9c to $1.25, reporting that acquisitions were behind its 73 per cent fall in half-year profit.

National Mail took a nasty 12c tumble to 50c. Other stocks to fall included Arthur Barnett, 12c to 81c, Fletcher Building, 7c to $1.89, Renaissance, 12c to 95c, Sky TV, 8c to $2.68, and INL, 10c to $3.20.

Those to buck the trend included AMP, up 49c to $25.25, Cavalier, 10c to $4.65, and Waste Management, 7c to $4.20.

- NZPA