March 17 (Bloomberg) -- Australia's S&P/ASX 200 Index fell. Telstra Corp. dropped to a record low on concern the nation's largest telephone company may cut its dividend payments.

The S&P/ASX 200 Index declined 6.2, or 0.1 percent, to 4971.7 at the 4:15 p.m. close in Sydney. Earlier it came within 3 points of reaching 5000. Ninety-six stocks fell and 91 advanced. The benchmark gained 1.7 percent this week, yesterday surpassed its record, set Feb. 1.

``The index nearly hit 5000 this morning, but never quite made it,'' said Don Hamson, who manages $3.8 billion at State Street Global Advisors in Sydney. ``For some, it represents some kind of psychological barrier.''

New Zealand's NZX 50 Index slid 1.02 points to 3552.45 at the 5 p.m. close in Wellington.

Telstra dropped 6 cents, or 1.6 percent, to A$3.71, a record-low. The stock is 10 percent below the government's target price for the sale of its controlling stake, planned for October or November this year.

Regulatory decisions could have a ``horrendous outcome'' on the company and prevent it from paying its proposed 28 cents-a- share dividend over the next three years, Chief Financial Officer John Stanhope told a Citigroup conference in London last week.

``The yield on Telstra has been very good'' but going forward that's ``subject to regulatory outcomes,'' said Rob Patterson, who manages about $2 billion including 18.6 million Telstra shares at Argo Investments Ltd. in Adelaide.

The S&P/ASX 200 Index's futures contract for June fell 1 point to 4987. The broader All Ordinaries Index slid 0.1 percent to 3932.7.

The following shares also rose or fell. The stock symbols are in brackets after the company names.

Australian stocks:

Mining shares: BHP Billiton (BHP AU), the world's biggest mining company, rose 24 cents, or 1 percent, to A$24.70. Rio Tinto Group (RIO AU), the third-biggest miner, added 35 cents, or 0.5 percent, to A$71.25.

Copper futures in Shanghai rose as much as 1.3 percent on speculation that U.S. interest rates may not increase much more, easing concern of a further reduction in demand in construction, the biggest use for the metal. Yesterday, a measure of six metals including copper and zinc climbed 0.2 percent on the London Metal Exchange.

Aquarius Platinum Ltd. (AQP AU), which owns mines in Zimbabwe, climbed 40 cents, or 2.6 percent, to A$16.02. Impala Platinum Holdings Ltd.'s Zimbabwe unit, owner of most of the country's known platinum reserves, said it's ``encouraged'' by talks with the government on plans to transfer some assets into state hands.

Australian Ethanol Ltd. (AAE AU), which develops facilities used in the production of ethanol, surged 10 cents, or 24 percent, to 51 cents. The company raised A$12.5 million ($9.2 million) by selling shares to develop its Beatrice biodiesel project in the U.S. and its Swan Hill ethanol project in Victoria-state, Australia.

Bougainville Copper Ltd. (BOC AU), which owns the Panguna mine in Papua New Guinea, climbed 9 cents, or 11 percent, to 90 cents. The Panguna mine, which has been closed since 1989 due to civil war, may be reopened, a Sydney Morning Herald report said, citing the Bougainville president.

Pacifica Group Ltd. (PBB AU), an auto parts maker that includes General Motors Corp. among its customers, climbed 6.5 cents, or 3.4 percent, to A$2. GM spokesman Jeff Kuhlman said in an interview that sales of the company's redesigned large sport- utility vehicles will rise 61 percent in March from the prior month. GM is accelerating production for some models to meet demand.

Symbion Health Ltd. (SYB AU), the health-care company split from Mayne Group Ltd., added 4 cents, or 1.3 percent, to A$3.22. Macquarie Equities Ltd. raised its rating for the stock to ``neutral.''

New Zealand Stocks:

Briscoe Group Ltd. (BGR NZ), which operates a chain of homeware stores and Rebel Sport outlets, rose 4 cents, or 3 percent, to NZ$1.36. Briscoe said full-year profit rose 35 percent to NZ$25.2 million ($16 million) as it cut costs and boosted its profit margin.

Fisher & Paykel Appliances Holdings Ltd. (FPA NZ), New Zealand's biggest home appliance maker, jumped 18 cents, or 4.5 percent, to NZ$4.19. The company may expand its U.S. factory to four times the workforce should sales rise, the New Zealand Herald said. U.S. growth and the benefits of a lower New Zealand dollar are boosting the stock, said Grant Williamson, a partner at brokerage Hamilton Hindin Greene.

Telecom Corp. (TEL NZ), New Zealand's largest telephone company, dropped 10 cents, or 1.8 percent, to NZ$5.40. Andrew White, an analyst at Goldman Sachs JBWere, said in a report that the government will probably force Telecom to allow rivals access to its copper lines to increase broadband use. That would cut Goldman's valuation 8.2 percent to NZ$4.95, it said.

To contact the reporter for this story: Stuart Kelly in Sydney skelly22@bloomberg.net

Last Updated: March 17, 2006 00:51 EST