KEY POINTS:
The New Zealand sharemarket shed 1.2 per cent today, but strong interest in Telecom stopped the market plunging as far as other bourses in the region.
The heavy losses began on Wall Street overnight where the Dow and S&P tumbled nearly 3 per cent, after a French bank froze three funds that invested in US subprime mortgages, prompting central banks to take steps to calm investors.
Asian markets were down more than 2 per cent, while Australia's benchmark index was 3 per cent lower.
The NZSX-50 index, which gained more than 1 per cent yesterday, closed down 50.58 points at 4109.84 on turnover totalling $163.5 million.
Investors also pushed down the New Zealand dollar, which has lost over 3 per cent to 10-week lows around US74.10c.
"Obviously we've had a decent follow-through from the difficulties offshore," said Goldman Sachs JBWere dealer Peter Sigley.
"We've fared quite well ... the reason for that, though, is Telecom's been quite firm, on quite heavy volume as well."
Telecom closed up a cent at 435 on $81m worth of shares, one of just four top-50 stocks to rise. It is recovering from a 10-month low on Monday in the wake of its annual result last week, and amid concerns about industry regulation.
The New Zealand telco was also benefiting from disappointment about Telstra's cautious outlook when it reported a 2.9 per cent rise in annual net profit yesterday.
"Telstra put out a poor guidance yesterday and the stock got hammered, and we think that there's been switching from Telstra into Telecom," Mr Sigley said.
"Outside of that, the misery's pretty much universal, particularly anything that's had a decent run recently.'
Second-ranked Fletcher Building lost 23c to 1224 after a decent rebound yesterday.
"It shows how fickle the market is, and the company did put an excellent result out the other day so there hasn't been too much reward for that," Mr Sigley said.
Contact Energy was down 23c at 921, Fisher & Paykel Healthcare was flat at 350, F&P Appliances lost 7c to 343, and Auckland Airport was down a cent at 315. Sky City and Sky TV were both down 5c, at 462 and 560 respectively.
The other stocks to gain today were Freightways, up 7c at 407, Vector, up a cent at 260, and Lion Nathan, up 10c at 960.
The Warehouse lost 18c to 607, Mainfreight shed 5c to 750, Infratil was down 5c at 299, and NZX lost 30c to 1000.
The biggest losers in percentage terms were Air New Zealand, down 9c, or 3.6 per cent, at 244, and Tower, down 8c, or 3.5 per cent, at 218.
GPS systems maker Rakon fell 2.9 per cent, or 14c, to 468 after warning about the effects of the high New Zealand dollar on annual earnings, but implying business was going better than expected.
The domestic earnings season is underway, but it was difficult to know where the market was headed next week as its direction depended on global events.
"Our only view is that it's going to be a choppy ride," Mr Sigley said.
- NZPA