The sharemarket got off lightly with a 1 per cent fall following ugly scenes on the US and British markets on Friday, brokers say.
Telecom took the brunt of the punishment here, dropping 2.5 per cent, or 13c, to $5.15. But even that was a mild whipping compared with the 5
to 7 per cent falls that many international telecom companies took on Friday.
Telstra fell 8c to a three-year low of $6.40.
"It was actually a relatively good start to the week in the face of poor international markets," said Don Turkington, executive director at Forsyth Barr Frater Williams. "If you put Telecom to one side, it was extremely good."
The NZSE-40 index fell 20.60 points to 2026.42 while the Top 10 index fell 10.16 points to 881.91 and the small stocks index fell 15.14 to 5503.00. Friday saw the Dow down 2.2 per cent and the Nasdaq index down 3.7 per cent.
Turnover at $78.4 million was steady for a Monday and better than recent poor showings. Falls beat rises by 69 to 35.
Among the dross, there were one or two specks of gold, the best being Contact Energy, which hit an 18-month high.
Already strong on Friday on reports of profit earnings upgrades due to high electricity prices, Contact rose as high as $3.19 and ended the session 3c up at $3.17.
Dr Turkington said Contact had broken its previous trading range "like a knife through butter" and looked set to trade higher.
Brokerage firm ABN Amro Craigs upgraded its recommendation to "buy" from "hold," saying it was likely to benefit from the current dry, cold weather and high wholesale prices.
Analyst James Miller said he had revised up valuation on the stock to $3.42, labelling Contact "the pick of the litter" of New Zealand utility assets.
Fletcher Building continued its good run, closing just 1c down at $2.52. Like Contact, Building appears to have found a new, higher trading range after rising 6c on Friday.
Carter Holt Harvey held nearly steady, down 1c at $1.74.
DB was another to prosper yesterday, up 4c to $5.40, but on very light volume.
Air New Zealand B shares fell 5c to $1.40 and the A shares closed 1c down at $1.06.
Insurance stocks weakened. AMP fell 53c to $25.02, Axa eased 5c to $3.65, and Tower lost 10c to $5.20. Other financials suffered, with Westpac NZ down 33c to $15.17 and ANZ 40c to $19.40.
Lion Nathan dropped 18c to $5.42 and its target, Montana, rose 1c to $4.53.
Tasman Agriculture fell 8c to $1.70* and Restaurant Brands rose 6c to $1.53.
ABN Amro's Mr Miller said Natural Gas had been oversold, down 1c to 92c. NGC, the country's biggest energy retailer, has been struggling to cope with high wholesale electricity prices which have prompted it to warn of an expected loss of up to $310 million for the year to June 30. It has fallen 22 per cent since the company posted its first profit warning on June 8.
"Our view on Natural Gas is that it has been oversold, it will be a target for corporate action, and therefore we are positioning for an asset play story over the coming months," Mr Miller said.
- NZPA
* CORRECTION: The original version of this report stated incorrectly that Tasman Agriculture shares had fallen 8c to $6.40.
The sharemarket got off lightly with a 1 per cent fall following ugly scenes on the US and British markets on Friday, brokers say.
Telecom took the brunt of the punishment here, dropping 2.5 per cent, or 13c, to $5.15. But even that was a mild whipping compared with the 5
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