Future Fund: Telstra shares can't go much lower

Hit for six in an uncertain market.

The Future Fund has offered a ray of light for fellow Telstra shareholders battered by uncertainty over the carrier's negotiations with the Government and NBN Co, predicting there are "few scenarios" that could drag the share price any lower.

Appearing before the Senate Estimates Committee, Future Fund management agency general manager Paul Costello said the value of its 10.9 percent stake in the telco had declined further in the past quarter.

He said Telstra shares were down 7 percent in the March quarter or 2 percent in the financial year to date, impacted in part by the "broader slump in the market."

Costello conceded that ongoing uncertainty over the status of Telstra's negotiations around the national broadband network was also damaging the carrier's share price.

"As we think about the range of potential outcomes it would appear that a lot of bad scenarios are currently priced into the share price," he said.

"I think the share price has been marked down very sharply reflecting [the ongoing] uncertainty.

"[But] there would be very few scenarios we would imagine that would take it lower from here."

Costello said he - like other Telstra shareholders - looked forward to receiving some clarity around the outcome of negotiations.

"I think all Telstra shareholders would say the sooner an outcome, the better," Costello said.

He said news of an outcome "in many cases" was likely to have a positive impact on Telstra's share price - but conceded it would depend on the nature of the outcome.

Telstra shares were trading at $2.92 near the close of business on Wednesday, slightly higher than the $2.89 closing price on Tuesday.