NZ stocks: Telecom, airport bring on index slump

5.45pm

New Zealand's barometer top 40 share index today sank to its lowest point since October last year.

"It's been a tough day," said JB Were broker Murray Rutherford of the market's 0.7 per cent fall.

Much of the blame was put on institutions selling to raise cash to buy the quarter stake in Auckland Airport that is likely to be sold by the Auckland City Council.

The market was led down by heavyweight Telecom, which also sank to 13-month lows.

The NZSE-40 capital index closed 13.97 down at 1926.06, having at one point dropped to 1916.51. It is down 6 per cent for this year compared with the Dow's 13 per cent slide and the 10 per cent fall of Australia's benchmark S&P/ASX 200 index.

Brokers also blamed sickly global markets and Telecom's continuing slide for the depression in the index.

Telecom dropped to a low of 450 -- its lowest level for 13 months -- but recovered to finish on 457, down 6c on yesterday.

It dominated turnover, comprising $39 million of the total market turnover of $82 million with a big line going through at the bottom of the market.

Forsyth Barr Frater Williams broker Richard Burton said Telecom was being sold because of the overhang of the shares placed by Verizon earlier this year, the fact that telcos were out of favour generally and that Telecom was being undermined by the Telecommunications Commissioner opening up the phone market.

Telecom fell 12c yesterday and is now down over 4 per cent for the two days and 8 per cent for the year.

Sam Macdonald of Direct Broking said there were rumours of a renewed writedown in AAPT. He said the market was looking for further guidance from Telecom.

"We've beaten down this track before (with) AAPT a year ago, we had the same rumour hit the market and it was all on the back of comments of an Australian analyst and it just puts fear through our market."

AMP sank 66c to to 1424 after it resumed trading following a suspension. The financial services giant announced it would axe another 2000 jobs from its global operations as part of a major restructure and that it was unlikely to make a profit in 2002.

Auckland Airport was one of the few bright spots in the market, closing 6c up at 516 ahead of the closure of the book build. Brokers expect the acceptance price to be over $5/share.

Mr Burton said it was likely the stock would go up irrespective of the outcome of the council vote tomorrow or whether the holding was placed to a trade buyer.

Mr Rutherford, whose firm was leading with First NZ Capital the international book-build for Auckland Airport, said the process had gone well, with strong interest here and abroad.

Paramount Property Trust debuted on its issue price of 100 with half a million shares changing hands.

Tranz Rail, again battling poor publicity, this time over its inability to run trains in "hot" weather because of track buckling, slumped to a record low of 92c. However it recovered to 96, down 3c, after the company put out some soothing comments over the effects of the hot rails.

Independent Newspapers fell 16c to 281 amid fresh rumours that Telecom was again trying to sell its 10 per cent stake.

Contact Energy had a good day, rising 6c to 395, after it announced it was no longer pursuing NRG's assets in Australia.

Rarely-traded Kirkaldies fell 9c to 400.

Mr Rutherford said some stocks were sold to raise cash for Auckland Airport. Those to take solid falls including Ports of Auckland, 24c to 626; Fisher & Paykel Appliances, 20c to 1060, Fisher & Paykel Healthcare, 15c to 1020; The Warehouse, 7c to 705 and Westpac NZ, 13c to 1447.

The top 10 index fell 7.37 points to 864.60 while the small stocks index actually gained 4.91 points to 5575.55.

There were only 30 stocks to rise against 62 falls among the 128 traded.

- NZPA