Telecom fall drags market lower

Telecom shares ended down 5.16 per cent today after the company failed to get the first bite at the Government's ultra-fast broadband cherry and the fall proved a drag on the market as a whole.

The benchmark NZX-50 index closed down 9.406 points, or 0.298 per cent, at 3151.771 on a day in which Asian markets were mixed. The Australian market rose on better-than-expected employment numbers.

Telecom closed down 11c at 202, but off the 200 session low, after the company did not make a list of three initial investment partners named for prioritised talks for a portion of the broadband project. It is on a list of 14 companies which the Government's Crown Fibre Holdings (CFH) said remained important contenders for future negotiations and would continue in a partner selection process.

Telecom estimated the areas covered by these three parties represents around 12 per cent of the population of New Zealand.

"Telecom is not getting the first cut of the feast," said David Price, an institutional broker at Forsyth Barr.

"They are not out of the room but any negotiating they have to do is with the three parties selected as opposed to CFH," he said. However, Mr Price said it was not the end of the world and the market had probably over reacted.

Nuplex rose 2c to 339 on a day it signalled it was considering moving its primary listing to Australia.

"This would likely result in the payment of partially imputed dividends for New Zealand shareholders, greater liquidity in the larger Australian market and, we believe, a possible re-rating of Nuplex shares over time," the company said.

New Zealand Shareholders' Association chairman John Hawkins said it was disappointing to see a primary listing moving but the reality for shareholders in this case was that there were probably advantages for them.

Fletcher Building rose 6c to 822, Steel & Tube was up 4c to 246, and Cavalier Carpets was up 15c to 280. All are expected to provide services in the earthquake-hit Christchurch.

Contact Energy rose 3c to 571, Pike River Coal rose 1c to 110, and New Zealand Refining rose 2c to 322.

TrustPower rose 5c to 730 and Ebos rose 13c to 680.

AMP fell 6c to 635 amid speculation it could make a fresh bid for Axa Asia Pacific after National Australia Bank's bid was blocked by Australia's competition regulator.

In US, stocks rose on Wednesday as investors latched onto positive news out of Europe. A successful Portuguese debt offering as well as news that nationalised Irish lender Anglo Irish Bank would wind down assets pulled global equity markets higher.

The Dow Jones industrial average rose 46.32 points, or 0.45 per cent, at 10,387.01. The Standard & Poor's 500 Index added 7.03 points, or 0.64 per cent, at 1098.87. The Nasdaq Composite Index climbed 19.98 points, or 0.90 per cent, at 2228.87.

- NZPA