NZ stocks: Sharemarket catches cold from Wall St, Air NZ dives

The sharemarket caught a cold from the US market where stocks took a nasty tumble and the Dow dropped below the psychological 10,000 mark.

Local trading was very quiet with only $20.6 million worth traded by just after 11.30am. The NZSE-40 capital index was off 1.0 per cent, 22.03 points to 2056.59.

US stocks slumped to their lowest levels in nearly five months after a wave of dour outlooks from key tech firms like Sun Microsystems Inc sent investors bolting for the exits.

"Things get gloomier and gloomier, and today you can point the finger at Sun Microsystems and Corning," said Hugh Johnson, chief investment officer at First Albany Corp.

The Dow sank 171.32 points, or 1.70 per cent, to 9,919.58 - its first close below 10,000 since April 9. The technology-laced Nasdaq Composite Index tumbled 51.49 points, or 2.79 per cent, to 1,791.68.

Here, the falls were widespread. Telecom dropped 7c to 504.

The main feature was Air New Zealand's initial 6 per cent fall although it later recovered.

The B shares sank another 5c to 115, although they did drop as low as 112. The A shares fell 2c to 94 and had dropped to a 10 year low of 90c.

"It's fallen on ongoing speculation that there is going to be a deeply discounted rights issue," Forsyth Barr Frater Williams executive director Don Turkington said.

He said speculation in a Dominion article yesterday that the head shares might fall to the rights price had people rattled as had the delay on the decision on the share capital.

Fletcher Building fell back 4c to 267 after a good day yesterday on strong Australian building data.

Others to fall included, Baycorp, 24c to 1371, Contact, 3c to 344, Cedenco, 8c to 204, Sky City, 30c to 1150, Fisher & Paykel, 25c to 1395, NZ Refining, 20c to 1550, The Warehouse, 7c to 595.

Montana was steady on 478. Allied Domecq's 480/share offer is due to close today.

Tauranga-based TrustPower fell 5c to 325 after yesterday announcing it expected to post a significant loss for the first half and a small net loss for the March 2002 year.

Fletcher Challenge spin off Rubicon fell another 1c to 76c after losing 5c yesterday following big turnover earlier in the week.

Shares in Mainfreight, which rose 13c yesterday to 131 were steady today. Merger talk with Owens and Tranz Rail has been circulating.

Owens shares traded as high as 100 yesterday at 98 cents, a rise of 11c since last Friday. They eased 1c to 97 cents today.

Tranz Rail shares fell back 5c today to $4.40, having risen 20 cents for the week after hitting a year high of $4.50 on Wednesday when the Government announced it would make a decision on the sale of the Auckland rail corridor shortly.

There were 18 rises and 55 falls among the 116 stocks traded.

- NZPA