Telecom slip pulls down sluggish market

WELLINGTON - The New Zealand sharemarket is sluggish and is not expected to experience a burst of energy for now, says Cavill White Securities equities dealer Alan Wills.

"The tone of the market is pretty lethargic and the prospects are for more of the same," he said yesterday.

The NZSE-40 Capital Index closed down 19.92 points at 2009.97 yesterday.

Mr Wills said the main culprit for the index's fall was market heavyweight Telecom, which fell 15c to 735 on steady turnover of 5.3 million shares worth $39 million.

A weak bond market yesterday would have contributed to Telecom's decline, he said.

Number two stock Carter Holt Harvey softened 4c to 178, the result of weakness in the forestry sector in general.

While the stock closed unchanged yesterday, it fell 10c on Tuesday. It was going through a period of weakness, Mr Wills said. "Our market is pretty brittle at the moment and any selling in the leaders tends to press the price."

The Warehouse lost 5c to close at 468 yesterday.

"That's of no significance. I think people are still holding a very positive view as to the acquisition in Australia," he said.

Lion Nathan rallied 7c to 482.

"That's a stock that's been moving higher for some time now - it was up 7c Wednesday," Mr Wills said. "It's moving to Australia and going into the Australian index, and index buying out of Australia is probably the major factor that's driving the share price at the moment."

Fletcher Energy continued to gain on recent good news, up another 1c yesterday to 610.

Elsewhere on the sharemarket, Sky TV was off 15c to 400, and Baycorp and Trustpower both dropped 10c, to 1050 and 305 respectively.

Contact Energy was down 1c to 285, and INL softened 5c to 361.

Tower gained 6c to 512, Montana was up 9c at 225 and recent listing Frucor rose 2c to 147, but was still below its 150 issue price.

- NZPA