NZ sharemarket falls in early trading

The New Zealand sharemarket opened sharply lower today, as leading stocks reported falls in annual profit and after a negative session on Wall Street.

Telecom eased 3c to $2.07 after announcing a 4.5 per cent fall in its bottom line net profit to $380 million, with revenue down 6.5 per cent to $5.27 billion. But chief executive Paul Reynolds signalled an end to earnings declines, pointing to a fall of 0.2 per cent in the company's full year adjusted earnings before interest, tax, depreciation and amortisation (ebitda).

Fellow market heavyweight Contact Energy quickly shed 12c off its share price to $5.70, with its underlying after tax profit down 6 per cent to $150m - impacted by contractual obligations to pay for gas it was unable to use in its gas-fired power stations, while hydro generation reaped the benefits of wet weather.

The third company to unveil its result before the market opened this morning, Michael Hill International, eased 1c to 68. Its after tax profit slumped 60 per cent in the tough retail environment to $26.51 million.

The benchmark NZX-50 index fell 21.44 points or 0.7 per cent to 3008.35 in its opening minutes of trading.

Fletcher Building, which had posted strong gains after its annual result relieved investors of their worst fears by being in line with expectations, fell 8c to $7.35.

Among leading stocks to firm against the trend early today, Tower gained 2c to $1.89.

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US stocks tumbled to their lowest close in nearly a month as the latest batch of data amplified concerns the economy is stuck in neutral.

The Dow Jones industrial average dropped 144.33 points, or 1.39 per cent, to 10,271.21. The Standard & Poor's 500 Index fell 18.53 points, or 1.69 per cent, to 1075.63 for its lowest close since July 21. The Nasdaq Composite Index lost 36.75 points, or 1.66 per cent, to 2178.95.

- NZPA