NZ stocks: F&P Appliances, Warehouse push index up

12.00pm

A push to fresh records by Fisher & Paykel Appliances' (FPA) shares and further strength by The Warehouse drove sharemarket benchmark indices to five week highs in early trading today.

FPA, which had already touched a record $13.95 on Friday, jumped 45c, 3.3 per cent, to a fresh record of $14.35 after the company announced it was signing a global alliance with Whirlpool Corp, the world's biggest whiteware appliance company.

The Warehouse continued its good form after delivering a strong sales report last week. It was up 13c, 2.7 per cent, to 495 today.

The NZSX-50 index was up 5.60 points to 2207.84, a five week high and only five points off its all-time high. Introduced on July 1, the gross index has been plotted back to February 2001. The older top 40 capital index was up 3.13 points at 2127.51 at 11.45am and was at its highest since early July.

There was a mixed message from Wall Street on Friday with blue chips broadly up, buoyed by a sales report from hamburger company McDonald's and the high tech Nasdaq down.

The Dow Jones industrial average ended up 64.64 points, or 0.71 per cent, at 9191.09, the broader Standard & Poor's 500 Index rose 3.47 points and the Nasdaq ended off 8.15 points, or 0.49 per cent, at 1644.03.

ABN Amro broker Matt Willis said last week's positive tone had carried over to this week.

"There seems to be a shortage of stock in the major stocks. It almost feels like a squeeze," he said.

The good results in the current reporting season and expectation of further to come was behind the rally, he said.

On the face of it, the FPA-Whirlpool deal looked very positive with the US company a key player in global markets, he added.

There was no indication of Whirlpool taking an equity stake in the tightly held New Zealand company, but there would inevitably be speculation in that direction, he said.

Sister company F&P Healthcare was up 10c to 1220.

Briscoe, which in contrast to fellow discounter The Warehouse, was marked down last week on a disappointing sales report, recovered 5c today to 177.

Mr Willis said The Warehouse was undergoing a relief rally -- that its Australian operation was recovering and that the company was not being affected too much by the expected headwinds the sector was likely to experience as the economy slowed. However, the company's result on September 5 would show how much margins had been eroded.

Retail sales data today should buoy the sector with June Quarter seasonally adjusted sales well ahead of expectations at 1.5 per cent growth against forecasts of 0.2 per cent. June month growth of 0.5 per cent was marginally better than forecasts.

Economists said there was now a slimmer chance of a cut in interest rates at the Reserve Bank's next rate review on September 4.

Market leader Telecom was down 2c earlier at 528 after its strong performance last week in the wake of a well received annual result. It comprised $4.1 million of the market's early turnover of $11.2 million.

AMP recovered a little from its latest battering last week, up 3c to 503.

Among the leaders, Fletcher Building rose 5c to 420, Auckland Airport was up 7c to 605, Lion Nathan fell 10c to 615, and Carter Holt fell 1c to 164.

Cadmus was up 1.9c to 13c after Singapore's CET Technology invested around $1.2 million to take nearly 10 per cent of the company at 7.5cps.

Metlifecare was up 6c to 155 while NZX was down 9c at 480.

There were 36 rises and 34 falls among the 113 stocks traded.

- NZPA