NZ stocks: 'Dreadful dollar' fails to damage stocks

The New Zealand sharemarket survived the effects of the "dreadful" kiwi dollar to close higher yesterday, said Merrill Lynch institutional sales vice-president Richard Leggat.

"With the impact of the currency, the equity markets did well to close up."

The New Zealand dollar crashed to record lows as a rallying American dollar exposed its underlying weakness.

But Fletcher Energy, buoyed by the weak currency and its California-based Capstone investment continuing to strengthen, pulled the sharemarket up, Mr Leggat said.

The NZSE-40 Capital Index rose 4.29 points (0.20 per cent) to 2100.89, although the NZSE-SCI Capital Index was down 34.70 points (0.63 per cent) to 5450.19.

Turnover totalled $145 million, with rises outnumbering falls 61 to 49 among the 162 stocks traded.

Fletcher Energy rallied 25c to 790 on good volume of $12.3 million worth of shares, Mr Leggat said. Building gained 4c to 220 and Forests rose 2c to 90c.

The other main contributor to the sharemarket's gain was Lion Nathan's 23c leap to 475. Mr Leggat said Lion Nathan had a "good bounce" as index-related selling seemed to disappear.

"The stock has been weaker after it announced it was coming off the Morgan Stanley Capital Index but there was good buying demand today."

However, the currency's dive took its toll on several companies, such as Sky TV, which closed 8c lower at 380.

"The dollar is having an impact on companies like Sky TV, which came down because it has quite a big US dollar cost component - its programmes are paid for with US dollars."

Market giant Telecom was still struggling yesterday with the telecommunications sector overall looking weak, Mr Leggat said. Telecom closed 8c lower at 680 on good volume of $66.5 million of shares.

Aside from the currency woes, positive news saw some stocks gain, Mr Leggat said.

Auckland Airport - which on Tuesday said it would increase its landing charges - closed 4c higher at 299.

Also making gains, Fisher and Paykel rose 5c to 750, while Axa and Brierley each gained 2c to 352 and 41c respectively.

But Frucor fell 7c to 233 despite posting a $9.6 million net profit in its maiden announcement since listing for the year to June 30.

Also on the downside, GDC fell 15c to 465, and Baycorp and INL both lost 8c to $12.90 and 392 respectively.

Carter Holt Harvey, Contact and Tower all sustained 1c drops to 182, 256 and 532.

- NZPA