The New Zealand sharemarket shed 1.65 per cent yesterday as stock-specific situations outweighed any benefit from strength on Wall St.
The NZSE-40 capital index ended down 32.46 points at 1929.44, giving a 51 point or 2.5 per cent loss since Friday's close.
Smaller stocks, however, again ignored direction from the majors, the
NZSE-SCI capital index rising 12.94 points to 5072.50.
"The market started low and kept going lower," Merrill Lynch's Richard Leggat said.
Telecom was the main casualty, and along with Air New Zealand, Contact Energy, Lion and Sky TV counteracted a 2.25 per cent rise on the Dow Jones industrial average.
Mr Leggat said Telecom fell 29c to 558 as people guessed the nature of a Telstra-Vodafone announcement yesterday afternoon. The Australian and British phone companies said they had a strategic alliance, marrying their respective wireless and fixed line networks.
Mr Leggat said the joint venture would stiffen competition for Telecom. The only bright side for the local telco might be the emergence of a telecommunications duopoly which could block new entrants.
Telstra finished up 10c at 810.
Elsewhere, Air NZ domestic A shares fell 6c to 161 and the foreign Bs lost 15c to 225 as rights payments loom.
Sky TV continued its recent decline, losing 10c to 310. Lion Nathan was down 5c at 485.
Contact Energy fell 4c to 278 as speculation cornerstone shareholder America's Edison Mission Energy would swoop on more stock cheapened by the weak kiwi dollar dissipated.
Fletcher Energy ended down 8c at 825. The Commerce Commission moved to extend its investigation into whether Royal Dutch Shell can buy it without raising competition concerns.
Internet company E-Force was steady on 10c despite a profit warning and comments on restructuring of the company which is already retreating from the aggregated buying model it was only this year set up to pursue.
Among the leaders, Carter Holt Harvey put some spine into the market with a 5c gain to 167. BILwas also positive, rising a cent to 34, and The Warehouse was up 5c at 625.
Tranz Rail dropped 10c to 340. AMP lost 66c to $22.30 and Axa fell 16c to 366.
- NZPA
