Telecom lost all of its recent gains today and dragged the broader market down with it.
The telco fell 11c or 2 per cent to 542 today. This morning it announced a major reshuffle at its Australian subsidiary AAPT.
AAPT's chief executive role will disappear as the business is splitinto consumer and corporate businesses. Telecom said it was still conducting a review of AAPT which could lead to the sale of the business, or the formation of a partnership to run it.
The market leader's fall pulled down the benchmark NZSX-50 gross index, which lost 1.53 points to 3368.43, and the NZSX-All capital index fell 4.2 points to 997.36.
Fellow bluechip stocks Fletcher Building and Contact Energy did their best to offset Telecom's loss, with both posting impressive gains today.
Fletcher Building rose 4c to 782. Hamilton, Hindin, Greene partner Grant Williamson said the stock was continuing to gain traction after an impressive half year result last week.
Meanwhile Contact Energy rose 18c to 725, adding to the 55c it picked up yesterday on news of a proposed merger with its Australian majority owner Origin Energy.
Some analysts and institutional investors said the proposa l undervalued Contact Energy.
ABN Amro analyst James Miller said after Contact yesterday reported a half year profit of $146.7m, he had hiked his valuation on Contact shares from $7.34 to $8.24.
Mr Williamson said some smaller shareholders were worried about gaining exposure to Australia's energy markets, but so far most seemed to see the advantages of more diversity and a bigger operation.
Sky City Entertainment was unchanged at 470, ahead of its half year result tomorrow. Market commentators are saying tougher gaming laws and the no smoking laws could have negatively affected the casino operator's earnings.
Mr Williamson said after a lull in financial reports out today the market should gear up in the second half of the week, with a flurry of results due including Vector, Auckland International Airport and Air New Zealand.
Vector was up 5c at 270 today, AIA gained 1c to 188 while Air New Zealand was down a cent at 128.
