NZ stocks: Good Contact result helps buoy market

12.00pm

A better-than-expected Contact Energy result was the highlight of morning trading today on the New Zealand sharemarket.

Although buoyed by a Wall St rally, early gains on the local market were eroded by late morning selling pressure. The NZSE-40 capital index was just 0.22 points ahead at 1960.07 shortly after 11.30am on turnover worth $20.1 million.

Contact reversed losses of recent days, jumping 11c to 384, after it posted a $107 million profit for the year to September 30.

The result was at the top end of analysts' forecasts, ranging between $93 million and $109 million.

The company, New Zealand's second biggest generator, also announced a final dividend of 15.4 cents per share.

Arthur Lim, of Macquarie Equities New Zealand, said the result was about 6 per cent higher than the market "consensus" forecast of $101 million.

"But most significantly analysts in the market had forecasts ranging from $93 million to $109 million, so the result has certainly surprised a couple of analysts who were pretty negative on the outlook for Contact's result this year against last year," Mr Lim said.

"And the dividend is also much better than the 10 to 12 cents per share the market had expected."

Wall St resumed its seven-week rally, after two days of losses, on renewed positive sentiment about a US economic recovery.

The technology-laden Nasdaq composite index rallied 45 points, or 3.26 per cent, to 1419.35 at close.

The Dow Jones industrial average climbed 148 points, or 1.75 per cent, to 8623.01, following a 104-point drop earlier this week. The broader Standard & Poor's 500 index jumped 17.4 points, or 1.94 per cent, to 914.15.

On the New Zealand market by late morning, among the few leading stocks in positive territory were Baycorp Advantage, up 5c to 230, Tower, 2c to 168, and Sky TV, 2c to 339.

Easing back were Carter Holt Harvey, 1c to 169, Auckland Airport 5c to 543, Fletcher Forests 1c to 21, Fletcher Building 1c to 323, Independent Newspapers 3c to 290 and Sky City 1c to 797.

Overall there were 27 rises and 25 falls among the 107 stocks traded.

- NZPA