Fletcher Building shares fell in a weak market today after the company upped its bid for Australian plumbing supplies firm Crane Group, winning the approval of Crane's board.

It was always likely to be a down day with turmoil in Egypt spooking markets globally and after United States stocks posted their biggest one-day loss in six months on Friday.

The benchmark NZX-50 index closed down 13.895 points, or 0.414 per cent, at 3338.74 after opening down 11.35 points.

Turnover was expected to be reduced by the Auckland Anniversary Day holiday but brokers said volume was good in both Fletcher Building and Telecom shares. Turnover was worth $84.98 million. There were 29 rises and 26 falls among the 104 stocks traded.

Fletcher Building shares closed down 16c at 773 but this was off the low of the session of 770.

James Smalley at Hamilton, Hindin, Greene said it was typical for the price of the bidder's shares to fall and the price of the target's shares to rise particularly when the bid has a scrip element.

"The market has taken it in its stride. The market thinks this is it," he said.

There may have been pent-up demand after the trading halt put on place last week was lifted.

Telecom fell 4c to 228 with 10.7 million shares traded.

New Zealand Oil & Gas shares fell 1c to 85 after the company said in its quarterly activities report that it would incur a "significant accounting loss" for the six months to the end of December due to the disaster at the Pike River mine, where 29 men lost their lives.

Bathurst Resources fell 4c to 130.

Sky City shares were down 5c early to 324, but ended down 1c at 328. Tower fell 1c to 195, Cavalier Carpets fell 1c to 319, Sanford fell 2c to 500 and SkyCity fell 1c to 328.

Mainfreight fell 2c to 814, Contact Energy fell 1c to 615 and The Warehouse fell 1c to 365.

Steel and Tube rose 3c to 230, NZ Refining rose 6c to 469 and Restaurant Brands rose 3c to 248. SkyTV rose 3c to 535 and TrustPower rose 4c to 724. Infratil rose 1c to 188 and Fisher & Paykel Healthcare rose 1c to 318.

Tomorrow Building Society Holdings, the merged entity made up of Marac Finance and Southern Cross and Canterbury building societies, begins trading on the exchange.

In the US on Friday (local time), increased instability in the Middle East drove up the CBOE Volatility Index, the stock market's fear gauge, as investors scrambled for protective positions.

Trading volume was the highest of the year at 9.97 billion shares on the New York Stock Exchange, the American Stock Exchange and Nasdaq, compared to last year's estimated daily average of 8.47 billion shares.

The market drop ended the Dow's eight-week winning streak and pushed the S&P 500 below its 14-day moving average for the first time in two months. Disappointing results from Amazon.com and Ford further added to the gloom.

The Dow Jones industrial average ended down 1.4 per cent at 11,823.70, the Standard & Poor's 500 Index was down 1.8 per cent at 1276.34, and the Nasdaq Composite Index fell 2.5 per cent at 2686.89.

- NZPA

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