NZ stocks: Telecom's tumble weighs on index

The sharemarket closed down yesterday after Telecom was pressured by institutional selling and most other blue chips also retreated.

The NZSE-40 capital index closed down 24.37 points, or 1.16 per cent, at 2076.74. Falls outnumbered rises 61 to 43 from 157 stocks traded. Volume of 33.9 million shares was worth $74.5 million.

Telecom, which makes up nearly a quarter of the NZSE-40's capitalisation, gave up the previous session's gain and more to close down 14c at $4.95 after trading as low as $4.90.

"It really just fell on order flow. There were orders to sell under $5. It bounced back late in the session. There was no news about the stock," said Richard Leggat, head of equities at UBS Warburg.

Telecom has its annual investor day in Wellington today at which analysts get a chance to question the company in detail about its outlook and strategy.

The market's second biggest stock, forest products group Carter Holt Harvey, finished down 2c at $1.99 after hitting its highest level since the first quarter of 2001 in Tuesday's session.

The Warehouse succumbed to profit-taking, after gaining strongly following Monday's interim results, and closed down 4c at $6.92.

BIL International, formerly Brierley Investments, fell 4c to 52c after announcing its British investment, Thistle, was selling a sizeable number of hotels.

BIL rose 12c in two days and brokers said yesterday's fall was rooted in disappointment that BIL was not completely divesting itself of Thistle.

"It's a classic example of buy the rumour, sell the fact," one broker said.

Auckland International Airport was one of only two components on the blue chip NZSE-10 index to gain, closing up 2c at $4.22.

That is just shy of the all-time high of $4.25 it reached last week after its first-half results beat expectations.

Natural Gas Corp advanced 1c to close at $1.23 on light volume.

Bargain-hunters snapped up Fisher & Paykel Healthcare after it traded as low as $9.15 - its lowest level since listing last November. The stock closed down 1c at $9.69.

Air New Zealand closed unchanged at 32c after Tuesday's potentially positive news that Patrick Corp has bought 50 per cent of Australian discount carrier Virgin Blue.

Analysts said this made Virgin a stronger possible business partner for Air NZ, following the collapse of its former unit Ansett.

Meat processor and exporter Affco ended unchanged at 33c after saying it will cut 110 staff to reduce costs.

* The New Zealand dollar plodded through the day, seeing virtually no action and was likely to fall overnight.

At 5pm the kiwi traded at 42.87USc.

- AGENCIES