NZ stocks: Market improves, but starved of corporate news

12:00 pm

The New Zealand sharemarket improved a tad this morning, but was starved of any real corporate news.

The benchmark NZSE-40 index added 4.08 points to 2126.31 by 11 am, on light turnover of $16.55 million.

"It looks like another day where we are going to be going sideways and any rises or falls will pretty much cancel each other out," JB Were senior investment adviser Peter Stokes said.

"Our market was fairly resilient against a weak Wall St yesterday, but they had specific issues about accounting, in the wake of the Enron saga.

"Now, with a stronger Wall St, our market is still subdued. Wall St is doing all the volatile days, where we are just standing still."

Market leader Telecom briefly hit 550 -- its best price since July last year -- before settling to trade flat at 548.

Number two stock Carter Holt Harvey was steady at 192, Auckland Airport fell 3c to 387, The Warehouse was up 4c at 669, Fisher and Paykel Healthcare added 25c to 1500, its Appliance cousin improved 5c to 1000 and Sky City added a cent to 607.

"It is really just on order flow and availability of stock at the moment, to determine whether a share is up a couple of cents or down a couple of cents," Mr Stokes said.

Takeover target Contact Energy was up 1c at 371 -- still well below Edison Mission's $4.14 offer, which closes Sunday, but above its trading level in recent days.

"People are looking at Contact Energy now, at these levels, given it has fallen on expectations that bid will not be successful.

"It is getting to a level now where people are interested in it for the long term," Mr Stokes said.

"Instititutions would prefer to be in it for the long term, rather than take the short term gains offered by Edison's bid."

Among the second-tier stocks, Genesis fell 3c to 320, Wrightson was up a cent at 121, and Vending Technologies was up 9c at 235.

Wrightson said today Mike Smith, the independent director of Fonterra who resigned this month because he said its governance was inadequate, has also resigned from the farm services company.

Rises outnumbered falls by 36 to 13 among the 97 stocks traded so far.

Meanwhile, in the US stocks rose after the Federal Reserve said the world's powerhouse economy was beginning to recover and a government report showed unexpected growth last quarter.

The Standard & Poor's 500 Index gained 12.57, or 1.1 per cent, to 1113.21. The Dow Jones Industrial Average climbed 143.65, or 1.5 per cent, to 9762.23, erasing a 0.9 per cent decline. The Nasdaq Composite Index advanced 20.44, or 1.1 per cent, to 1913.42.

The US central bank left its benchmark interest rate target at 1.75 per cent, a four-decade low, a sign its 11 reductions last year are helping to revive the economy.

A report from the Commerce Department showed the economy rose 0.2 per cent in the fourth quarter, after contracting 1.3 per cent in the July-to-September period as consumer and government spending surged.

- NZPA