NZ stocks: Leaders take a battering

The sharemarket tumbled about 2 per cent yesterday, driven down by market leaders Telecom and Baycorp.

The NZSE-40 capital index closed down 38.82 points - 1.93 per cent - at 1971.67, its lowest point since mid-January.

"It was one of our worst days for a wee while," Credit Suisse First Boston dealer David Price.

"It is a while since we were down 2 per cent without any news in the market."

Mr Price said there had been quite a bit of reinvestment in the market following the Montana takeover deal.

Baycorp was the biggest mover of the day on points, closing down 50c at $11.90 ahead of its half-year result next Wednesday.

Telecom also lost ground, shedding 22c to $5.32 on heavy turnover of 3.68 million shares worth $19.69 million.

Telcos worldwide took a bit of a battering overnight after French-owned cellphone firm Orange had a disappointing debut on the European and London exchanges, falling below its heavily discounted IPO price.

Telecom's Australian rival, Telstra, also nosedived yesterday, closing down 13c at 837.

Telecom, led by chief executive Theresa Gattung, has been driven down in recent days over its move into uncharted Australian waters. Media across the Tasman reported that Telecom may look to buy the Hutchison CDMA network if its bid for Cable & Wireless Optus' cellphone assets fails.

Rival bidder Singapore Telecom moved a step closer to Optus, approaching the Australian Competition and Consumer Commission to see if there were any potential hurdles to its bid, and was given the green flag.

Fletcher Energy dropped 7c to $8.93 as US associate Capstone Turbines lost more than 12 per cent in value overnight, falling to about $US29.25. Energy topped turnover at $27 million.

Sky City tumbled 37c to $8.85 after it said it was bidding 25c a share for cinema company Force. Force closed down 1c at 26c.

Montana continued its revival following its sharp fall on Friday when Lion Nathan completed its bid for 50.1 per cent. It was up 6c at $3.86. Lion Nathan closed down 10c at $4.54.

Queenstown-based Shotover Jet was up 3c at 58c after majority shareholder Ngai Tahu said it would lift its stake in the tourism company.

The Warehouse lost 14c to $5.30, Auckland Airport shed 10c to $3.29, Waste Management rose 22c to $4.82 and bio-medical firm Genesis lost 10c to $7.15.

- NZPA