KEY POINTS:
With the economic news out of the United States growing ever more gloomy, the New Zealand sharemarket started the week awash in red ink.
By 10.10am today the benchmark NZSX-50 was down 25.33 points, or 0.7 per cent, to 3557.39 points.
It was following the lead overnight Friday of US equities, with the Dow Jones industrial average losing 2.5 per cent on the day.
Today, top stock Telecom was down 4c to a 14-year low of 383, with Communications Minister David Cunliffe having told the company on Friday it needed to make changes to its amended separation package.
Air New Zealand was down a further 5c today to 162 early, with investors concerned about a challenging future for the company having knocked it down 9c on Friday, even as the company hiked its dividend by two-thirds and lifted half year net profit 58 per cent.
Heavyweight stocks Contact Energy and Fletcher Building were both on the slide early today after gains on Friday.
Contact was down 5c to 784 after a 15c rise on Friday, while Fletcher lost nearly all of Friday's 17c bounce to be down 14c at 945.
Mainfreight was down 24c or 3.7 per cent to 631 early today, with Infratil down 5c to 230, Nuplex down 6c to 610, Ryman Healthcare off 4c to 170, Sky City down 6c to 390, and The Warehouse off 7c to 588.
Among stocks to fall by 2c early were Guinness Peat Group down to 165, Hellaby Holdings to 215, Pumpkin Patch to 186, Sky TV to 500 and Trust Power to 750. Rakon was down 3c to 265.
The few shares in positive territory included Cavotec MSL Holdings, up 5c to 405, after reporting an 8.7 per cent increase in annual profit to 7.34 million euros ($13.9m) on Friday.
Also on the rise were Skellerup shares, up 6.6c to 93c.
Overnight Friday, the three big US stock indices posted their largest single-day declines since a plunge in early February.
Inflation fears came to the fore in government data indicating consumers were struggling in January to keep ahead of robust price growth, which remained uncomfortably high.
A drop in US consumer confidence to a 16-year low and a contraction in business activity in the auto-intensive US Midwest added more gloom to the bleak economic outlook.
"This is just the latest piece of evidence that the US economy is teetering on the edge of recession," said Chris Rupkey, senior financial economist at Bank of Tokyo/Mitsubishi in New York, referring to Midwest business conditions.
The Dow Jones industrial average skidded 2.51 per cent to 12,266.39. The Standard & Poor's 500 Index fell 2.7 per cent to 1330.72, and the Nasdaq Composite Index lost 2.58 per cent to 2271.48.
- NZPA
