NZ stocks: INL leads market 1.2pc higher

Independent Newspapers Ltd helped propel the New Zealand sharemarket nearly 1.2 per cent higher today.

The market gained a similar amount yesterday and the indexes are at eight week highs. With the notable exception of the beleagured Tranz Rail, buying was across the board.

The top 50 gross index closed up 24.40 to 2006.12, the top 40 capital index rose 25.00 to 1972.10, the top 10 capital index gained 16.18 points to 906.04 while the small stocks capital index gained 30.08 to 5567.94.

"The INL deal has put the spark back in the market," said Macquarie Equities broker David Cleal. "There's nothing like a bit of corporate activity to turn sentiment around."

INL shares, trading for the first time since their suspension on Friday ahead of the announcement that John Fairfax Holdings was buying its newspapers for $1.2 billion, closed 70 cents, or 21 per cent, higher at 408.

INL's 66 per cent-owned pay television asset Sky Network Television had risen 10.8 per cent during INL's trading halt but eased back 5c today to 400.

The market is waiting to see how the "booty" will be spend, with most punting that News Corp, 45 per cent owner of INL, will drive a merger of INL and Sky TV and make a full takeover.

UBS Warburg broker Campbell Stuart said that for the market in general it was a case of how much of the Fairfax money comes back into the market.

Tranz Rail had another dreadful day on the market. its stock fell another 6c, or 9 per cent, to 62c and it is now down 35 per cent in just over a week since it released its third quarter profit warning. That warning credit resulted in credit rating downgrades including a five notch jolt by Standard & Poor's. It has lost 85 per cent of its value in the last 12 months.

Brokers were unsure whether major shareholders were sellers today although they noted that Colonial has cut its holding from over 11 per cent to around 7 per cent in recent days.

More than $10 million of Tranz Rail stock traded, boosting otherwise modest market turnover to $71 million.

"The picture is not at all clear and in those circumstances investors have trashed the stock," said Mr Cleal.

Elsewhere on the market, the green ticks dominated. Telecom continued its great autumn run, rising another 2c to 475. It has risen 15 per cent in the last month.

Other significant rises included: Sky City 9c to 824, Sanford, 8c to 554, The Warehouse, 8c to 534, AMP, 25c to 830, Briscoe, 4c to 197, DB 10c to 635, Fisher & Paykel Appliances 10c at 1080, Ports of Auckland, 9c at 689.

In all, there were 56 rises and only 29 falls among the 136 stocks traded.

Air New Zealand slid another 1c to 43c and continued under pressure due to the general malaise among airline stocks thanks to the Severe Acute Respiratory Syndrome virus and the Iraq war and as investors doubt its proposed strategic alliance with Qantas will be allowed by regulators.

- NZPA