Erratic day ends down as Mainfreight, Telecom take hit

New Zealand's sharemarket dipped sharply in early trade yesterday, then clawed its way back towards the level of Tuesday's closing prices only to fall short and slip again.

The NZX-50 index dipped to 3411 points before spiking a few times to 3428 points before closing back at 3424.35, down 6.03 points (0.17 per cent) on Tuesday's finish.

Some of that intraday buoyancy came from data showing Chinese economic growth slowed less than expected in the second quarter, which helped ease worries about debt contagion in Europe.

"We must remember that the Chinese are purposely trying to slow their economy, unlike most of the Western world that would kill to be in the same position," said IG Markets strategist Ben Potter in Melbourne.

The share price for Diligent Board Member Services surged 14 per cent in early trading after the company reported soaring second quarter sales, and finished up 9.6 per cent, a rise of 12c to $1.37.

But the broader market was shakier as 71 million shares valued at $183 million changed hands, and though 117 stocks traded, the 64 falls outnumbered the 30 rises.

Mainfreight fell another 2.5 per cent, dropping 26c to $10.12 from the stock's record price of $10.56 reached last Friday.

Freightways was also down, by 2c (0.59 per cent) to $3.35.

Retirement village company Ryman Healthcare fell nearly 4 per cent to $2.65 after reports a large shareholder, the Tainui corporate arm, had sold out at $2.58 a share. More than 24.5 million shares changed hands as the price dropped 11c.

Fletcher Building lost another 4c (0.48 per cent) to $8.22 and cornerstone stock Telecom also fell 4c (1.6 per cent) to $2.46.5 and Abano Healthcare was down 8c (1.79 per cent) to $4.40.

NZX gained 1c (0.43 per cent) to $2.35 and Contact Energy rose 10c (1.91 per cent) to $5.33. OceanaGold rose 15c (4.35 per cent) to $3.60 after gold prices rallied to near record highs as moves to stem the European debt crisis failed to allay concerns the risk was spreading to Italy and Spain.

Across the Tasman shares on the ASX closed higher after Chinese economic growth data.

The benchmark ASX200 index was up 19.4 points, or 0.43 per cent, at 4514.8 points, while the broader All Ordinaries index was 19.7 points, or 0.43 per cent, stronger at 4583.2.

Chemicals maker Nufarm rose 0.5 per cent to A$4.50 after it said it expected at least a 50 per cent rise in underlying earnings in the year.

The Dow Jones industrial average fell 0.5 per cent to end at 12,446.88, the Standard & Poor's 500 Index was down 0.4 per cent at 1313.64, and the Nasdaq Composite Index lost 0.7 per cent to 2781.91.

-NZPA