NZX slips early as Telecom shares slump

The New Zealand sharemarket fell in early trade as top stock Telecom gave up 3.4 per cent.

Telecom shares were down 9c to $2.59, on top of a 4c fall yesterday.

Yesterday it was announced that the Australian government was seeking a demerger of Telstra's fixed lines business.

Around 10.20am today the benchmark NZX-50 index was down 1.77 points to 3097.86, having lost 29 points yesterday.

In contrast to the fall in Telecom's share price, gains were recorded early today by other top shares with Contact Energy rising 6c to $5.96, and Fletcher Building up 5c to $8.01.

Other stocks rising early included Sky TV up 7c to $4.65, NZ Refining Co up 5c to $5.00, Hellaby Holdings up 4c to $1.60, and Restaurant Brands up 2c to $1.03.

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In the United States, stocks rose to 2009 highs after stronger manufacturing and retail sales data boosted commodity prices and shares of materials companies.

The improvement in retail sales in August reassured investors about a rebound in US economic demand. A rise in the US government's Producer Price Index signalled increased consumption of raw materials.

The rise in producer prices and a report showing stronger New York state manufacturing suggested demand is building for raw materials.

The Dow Jones industrial average rose 0.6 per cent to close at 9683.41, the Standard & Poor's 500 Index gained 0.3 per cent to 1052.63, and the Nasdaq Composite Index added 0.5 per cent to 2102.64.

- NZPA