NZ stocks: Market follows gains in overseas markets

The sharemarket surged in to a new 15-month high for the second time this week, taking its lead from market heavyweight Telecom and positive offshore markets.

At 5pm, the benchmark NZSX-50 gross index was up 18.56 points at 2240.02, while the NZSX-40 capital index was up 15.64 points at 2155.61.

On Monday, the NZSX-50 hit a 15-month high of 2231.74 but that was overtaken today.

On the New Zealand exchange today, $80.3 million worth of shares were traded on volume of 30.4 million. Among the 142 stocks traded were 55 rises and 46 falls.

Telecom led the way, finishing up 13c at 511c. It traded $24.9 million worth of shares on volume of 4.9 million.

ABN Amro Craigs operator Matt Willis said Telecom's performance was a good one ahead of the Commerce Commission's draft ruling on the unbundling of its local loop network.

"I think we're seeing a bit of the loose (Telecom) stock shaken out of the market," Mr Willis said.

"The buying support in Telecom has been there but met with a bit of excess of supply over the last little while but I think that's been portfolio adjustment.

"The imbalance is returning to the demand side," he said.

Mr Willis also said the market had responded favourably to news that two parties were interested in buying Fletcher Challenge Forests (FCF) entire forest estate.

Last night, New Zealand-based consortium Kiwi Forests Group emerged with a $750 million cash and shares bid for Fletcher's 106,000ha forestry estate.

The offer is $65 million more than the clean, cash-only deal Fletcher Forests struck on Monday with The Campbell Group, a United States timber management company.

Market speculation has it that the agreement with The Campbell Group includes a $10 million break fee.

FCF shares closed up 3c at 124.

"What it (the Kiwi Forests Group offer) does do is create some competitive tension there in terms of those forestry assets," Mr Willis said.

FCF 19.9 per cent shareholder Rubicon were up 1c to 73 at market's close.

Overseas, in New York, US stocks rallied yesterday as investors took comfort from the Federal Reserve's widely expected decision to keep US interest rates at historic lows, lifting hopes that low rates would help spur the current economic recovery.

The Dow Jones industrial average ended up 118.53 points at 9567.34, its biggest percentage gain in more than seven weeks.

In London, retailers helped push Britain's top share index to a fresh one-year high and Japan's TOPIX stock index closed at a 15-month high.

"I don't know if it (the gains in overseas sharemarkets) created any extra flow in our market, but certainly from a sentiment point of view it was good," Mr Willis said.

On NZX, shares on the rise included: Auckland International Airport up 12c to 665, AMP up 5c to 755, Fisher & Paykel Appliances up 5c to 1475, Lion Nathan up 5c to 605, Baycorp up 7c to 262, and TrustPower up 14c to 495.

On the downside were: Contact Energy down 6c to 477, Air New Zealand down 1c to 54, F&P Healthcare down 5c to 1245, Infratil down 2c to 223, and The Warehouse down 1c to 520.

- NZPA