Offshore selling hits titanic Telecom

In a wave of heavy selling, overseas investors abandoned Telecom yesterday, sending the sharemarket titanic plunging yet lower in the water and sucking the key market index down with it.

"It was a colossal day for the market, dominated by Telecom, where more than 20 million shares were traded. After hitting an intra-day low of 693 it finished at 700, down 18c," said Cavill White Securities equities dealer Alan Wills.

Off-market turnover of $240 million, Telecom accounted for $147 million and clocked up another 32-month low.

"Outside of Telecom, there were just minimal movements in the leaders. Fletcher Energy started the day better, reaching 680 then fading to finish down 4c at 660. There was also good turnover in Fletcher Forests, which was down 2c at 78."

But the whole focus of the day was on Telecom, which has been mostly in retreat since April and has not shown a rise for a week.

"The direction of the market is dependent on where Telecom ends up. There are a number of issues at play," Mr Wills said.

"There is talk of broker downgrades in terms of earnings forecast, talk about dividend cuts and uncertainty as to what the strategy of the company is ..."

Another telco, Telstra, which has been showing improvement, lost its footing yesterday, its head shares falling 9Ac to 916, and its instalment receipts 15Ac to 525.

For those looking for good news, AMP continued its recovery with a 79c jump to $23.05, and The Warehouse expanded 15c to 545 despite the release of soft national retail sales data for May.

Carter Holt Harvey added 1c to 180, Contact Energy 2c to 290 and INL, 6c to 415. Fletcher Paper firmed 1c to 247 and Fletcher Building, 5c to 235.

Among the losers were Fisher & Paykel Industries, down 3c to 665, Lion Nathan, 8c to 472, and Sky Television, 7c to 400. Brierley Investments eased 1c to 32.

- NZPA