Telecom sets new low as shares tumble

Telecom's share price plumbed new lows on low volume as a renewed rout of equity markets globally overwhelmed positive news like a hike in dairy co-operative Fonterra's payout for next year.

The benchmark NZX-50 index closed down 57.398 points, or 1.875 per cent, at 3003.826. Turnover was worth $96.3 million. There were 12 rises and 68 falls among the 114 stocks traded.

Telecom simply had no friends on a bleak day on equity markets, closing on a new record low of 185.

Telecom was drifting lower on low volume, said Stephen Wright at ASB Securities. The volume today of 8.6m million shares compared to daily volumes of 12 to 26 million last week.

"A feature of our market at the moment is that it is pretty quiet," he said.

Fonterra has increased its forecast payout for next season to between $6.90 and $7.10 per kilogram of milksolids and raised expectations that the payout could top $8, providing a large boost for the New Zealand economy.

But Mr Wright said the news had little impact on any share prices. NZ Farming Systems Uruguay rose 2c to 43 but NZX was unchanged at 155. PGG Wrightson was unchanged at 53 and Pyne Gould Corp eased a cent to 43.

Mr Wright said weak equity markets last night, weak Australian and Asian markets in this time zone, and the prospect of weak markets overnight combined to affect the local market.

AMP Office Trust was unchanged at 71 after disclosing a decline in its portfolio value.

Fletcher Building fell 21c to 761, Contact Energy fell 5c to 592 and SkyCity fell 2c to 289.

Mainfreight fell 6c to 598, Port of Tauranga fell 5c to 685 and NZ Refining fell 5c to 333.

TrustPower fell 1c to 719 and Pike River Coal fell 1c to 100.

Air NZ fell 1c to 119 after saying it was confident enough to increase capacity on some routes.

Other losses included Ebos down 16c to 609, The Warehouse 12c to 352, Auckland Airport 6c to 183, Rakon 2c to 97, APN news 4c to 270 and Guinness Peat Group 1c to 76.

In the US, stocks slid on Monday as fresh signs of Europe's banking problems emerged.

The move by the Bank of Spain to take over a small savings bank, CajaSur, over the weekend, increased anxiety among investors worried about debt problems spreading throughout financial markets.

The Dow Jones industrial average dropped 1.2 per cent to 10,066.57, the Standard & Poor's 500 Index slipped 1.3 per cent to 1073.65, and the Nasdaq Composite Index fell 0.7 per cent to 2213.55.

- NZPA