NZ Stocks: Telecom meets selling ahead of result

The tone of the New Zealand sharemarket remained negative yesterday, with Telecom again selling off ahead of its first-quarter result.

Turnover was very light, Telecom shares making up $17 million of the day's $44 million total. Its shares fell 15c to 570 as punters predicted the telco would post a reduced profit today as increasing costs outstrip modest revenue gains.

"People are staying on the sidelines awaiting that result," Shane Gavegan of Deutsche Securities said.

"It's going to be a pretty uninspiring result. What people want to see from here is Telecom's strategy in Australia going forward and I don't think they are going to be in a position to say anything as yet," he said.

The NZSE-40 capital index dropped 16.89 points, just under 1 per cent, to 1971.45 and the top 10 capital index was down 10.86 at 876.26. The small stocks capital index slipped 15.59 points to 5135.84.

The day's uncertainty was largely due to a shaky end to the week in overseas markets.

"The international markets were weak on Friday and that has spilled over to here," Richard Leggat of Merrill Lynch said.

US stocks fell sharply on Friday after a weak sales outlook from Dell Computer sent the Nasdaq market to its lowest close of the year, capping a dismal week dominated by uncertainty over who will enter the White House.

The tech-rich Nasdaq composite index dropped 171.36 points, or 5.35 per cent, to 3028.99. The Dow Jones average index dropped 231.30 points, 2.13 per cent, to 10,602.95.

In other movements here, Fletcher Forests attracted some interest in its first day of trading ex-rights, closing down 6c at 27 - effectively down only 0.67c on the impact of the 2:1 rights issue at 25c. The rights lost 0.9c to 1.8.

Fletcher Building suffered from profit-taking in the wake of its good run above 200 over the past few days, ending the day down 6c at 201 while Fletcher Energy rallied 12c to 815.

Tranz Rail was down 20c at 360 on light volume following Friday's announcement that its major shareholders Wisconsin and Pacific Rail could sell their stake in the rail operator.

"The news that Wisconsin and Pacific Rail are likely sellers will see that stock go lower," Mr Leggat said.

AMP fell sharply early in the session before recovering to end the day up 9c at $23.60 while ANZ Bank ended down 15c at $19.15.

The Warehouse lost 5c early in the session after shedding a 4c dividend but later recovered to end the day unchanged at 630.

Another ex-dividend stock Auckland International Airport was down 5c at 2.94 after shareholders received a 5.2c payout per share.

Williams and Kettle was down 10c at 260 after paying a dividend of 8c.

In all, there were 42 rises and 57 falls among the 144 stocks traded.

- NZPA