NZ stocks: Telecom takes a tumble

A buoyant Air New Zealand was unable to counteract the effects of a falling Telecom yesterday.

Telecom's 14c drop to $5.37, on the back of negative global telco sentiment, contributed to the NZSE-40 capital index's 7.84 point drop to 2040.70.

The small companies' NZSE-SCI capital index fell even further, losing 36.79 points, or 0.67 per cent, to 5423.14.

Turnover of 28.79 million stocks valued at $61.77 million was topped by Telecom's $28.61 million of shares traded.

JBWere adviser Mark Gander said Telecom's fall was "very much in sympathy with the current trend in international telecommunications stocks." Telstra also tumbled 15c to $6.95.

"Air NZ shares were somewhat firmer during the day in anticipation of an announcement from the Crown or Singapore. They're evidently locked in negotiations at the moment."

Air NZ's domestic A shares rose 2c to $1.21 and the Bs gained 7c to $1.63, the highest for both classes of shares in more than nine weeks.

Air NZ finished a two day board meeting in Auckland yesterday to discuss the reconfiguration and refinancing of the airline.

Options facing the company include the proposed purchase of a controlling stake by Qantas, or more involvement by key shareholder Singapore International Airlines.

Brierley Investments shares gained 2c to 67c.

Otherwise the market was "very quiet," Mr Gander said.

Defensive stock Lion Nathan gained 7c to $5.24, and winemaker and takeover target Montana was up 1c at $4.81.

The Warehouse shed 7c to $5.65, TrustPower slipped 14c to $3.26 and Fletcher Building lost 2c to $2.29..

PDL Holdings shed 50c to $10.00. The Stewart family of Christchurch will pocket slightly more than $97 million from the sale of their controlling shareholding in PDL to French conglomerate Schneider Electric.

The deal ended 44 years' ownership of the business bought by Sir Robertson Stewart, initially in plastics manufacturing but now in electronics.

Baycorp gained 5c to $12.05, Natural Gas Corp was up 2c at $1.00 and Tasman Agriculture rose 5c to $1.55.

* The New Zealand dollar drifted lower again yesterday, dragged down by weak overseas sentiment.

At 5 pm, the kiwi was at 41.42USc from 41.65c at Monday's close.

"Overall the kiwi has been dominated by a weak sentiment due to a lot of weaker numbers out of the US and revisions downwards of European growth numbers," Bank of New Zealand forex manager Greg Ball said.

Interest rate differentials no longer seemed to be working in favour of the antipodean currencies, he added.

"Out of the four currencies - the kiwi, aussie, sterling, euro - we are probably performing the best, maybe with the exception of the euro. That could well be because of interest rate differentials but it is most likely to be through lack of interest."

- NZPA