12.00pm
Telecom shares were volatile this morning after the sale of 20.5 per cent of its stock overnight.
Verizon yesterday sold its stake initially to Merill Lynch at $4.35/share, a 10 per cent discount to yesterday's price, and the stake was on-sold to a variety of mostly US, British and Australian institutions at $4.50 per share, a 6.6 per cent discount.
When the local market opened, Telecom initially dropped 7c to 4.75, then bounced to 480 before slipping 13c to 469 just after 11am.
The NZSE-40 Capital Index was down 12.81 points to 1977.70 on a massive volume worth $1.738 billion. The daily turnover was a market record, beating the $1.33 billion on April 27, 1998 when $603 million Lion Nathan shares were sold.
Brokers said getting Verizon off Telecom's register was good news for the phone company and they expect the share price to recover over the medium-term.
UBS Warburg broker Richard Leggat said it appeared the allocations to New Zealand accounts were low and "obviously some big international players stepped up to the plate and said 'this is a good deal, thanks very much'."
"I think there is going to be a bit of indigestion around these levels. I don't think Telecom will shoot away but medium, longer-term it is very good."
He said nearly all the market focus was on Telecom.
Overseas markets had another good session overnight.
A slew of unexpectedly strong US economic data boosted US blue chips as investors hoped a better outlook for corporate profits would follow, but technology stocks lagged after a dramatic snapback on Wednesday.
The data took the edge off fears over the pace of the economic recovery. Orders for durable goods dipped in August, but the drop was smaller than expected. New jobless claims fell for the second straight week, and sales of new US homes rose to a record level in August.
The blue-chip Dow Jones industrial average closed up 155.30 points, or 1.98 per cent, at 7997.12. The Dow hit a four-year low on Tuesday.
Although the Nasdaq closed slightly lower, more stocks rose than fell on the market.
Taking further heart from the recovery of global markets, AMP rose 45c to 1435.
Hallenstein Glasson was down 5c to 275 after announcing a flat profit yesterday including a disappointing result in Australia which the company refused to detail.
Carter Holt Harvey rose 2c to 163 following a positive outlook report by its parent International Paper and a rating upgrade to "outperform" by broker First NZ Capital.
Sky City fell 13c to 722, Fisher & Paykel Appliances were steady at 1025, Fletcher Building was also steady at 290, Westpac NZ fell 30c to 1625 and Briscoe fell 6c to 251.
There were 33 rises and 25 falls among the 97 stocks traded in the first half hour.
- NZPA
<i>NZ stocks</i> Record turnover, Telecom volatile after selldown
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