NZ stocks: Telecom weighs heavily on flow-driven market

Telecom's ill fortune continued to weigh on New Zealand's sharemarket today.

The country's top stock fell to its lowest level in three years, $4.14, just three cents higher than an intra-day low in March 2003.

At the end of trading, it edged up to 416 , off 6c on $44m worth of shares.

Telecom has been continuously plagued by negative sentiment, largely relating to regulatory concerns and weak offshore markets.

A technical analyst said the stock was at a crucial point and could fall as low as $3 in the next nine months to a year.

If it fell through current levels, it would initially be supported around $3.80c, he said.

Brokers said today's fall was probably due to yesterday's Commerce Commission draft which gives Vodafone access to Telecom's network to allow mobiles to make local calls.

Elsewhere, trading was flow-driven with no news and brokers out of the office for various reasons.

Total turnover was a moderate $111 million and the benchmark NZX-50 index was down 17.96 points to or 0.5 per cent to 3546.54.

There was a solid $17m turnover in Waste Management which stops trading on Thursday in preparation for its delisting in a week. It fell a cent to 859.

Apart from Telecom, the biggest drag on the index was Sky TV, down 19c to 542.

No 2 stock Contact Energy dropped 5c to 730 , and star performer Fisher & Paykel Appliances drifted back 9c to 450 after buying an Italian company last week.

Rises included Fletcher Building, up 2c to 872, Hellaby up 11c to 503, Ryman up 3c to 835 and Trustpower up 30c to 720 -- possibly on news that electricity demand reached an alltime high last night.

One broker suggested Vector was stronger because bidding for GasNet in Australia had made Vector look cheap on a multiple basis. Vector closed up 3c to 250.

The NZSX all capital index fell 5 points to 1021.55.

Offshore, US stocks fell sharply after yet another Federal Reserve official warned about inflation, renewing worries about higher prices and the outlook for interest rates.

The S&P 500 and the Nasdaq ended down almost 1 per cent and the Dow Jones slid 0.66 per cent.

- NZPA