NZ stocks: Market led higher by heavyweights

The New Zealand sharemarket today followed global trends upwards, led higher by the heavyweight stocks that were sought by foreign investors.

The NZSE-40 capital index closed 11.68 points up at 1994.88 on turnover worth $64.2 million.

The top 10 index rose 8.96 per cent, or 1 per cent, to 906.11 while the small stocks index gained 7.32 points to 5733.82.

The upturn mirrored Wall St, where US markets were reacting positively to a major switch from bonds to equities overseas.

"It started in Europe, it's asset allocation switch from one of the big pension funds out of the US, so that's given all the world markets a bit of a boost and potentially some of that might be coming in here," JB Were institutional adviser Joe Gallagher said.

Telecom dominated, rising 5c to 470 on $22.3 million worth of shares as it followed overseas markets.

Credit ratings agency Standard and Poor's said today that Australasian telcos were relatively insulated from the sector's worldwide malaise, and gave them a steady outlook.

Forestry giant Carter Holt rose 5c to 188 on $6.6 million worth of shares. The stock has risen 5 per cent in a week as northern hemisphere fund managers adjusted their portfolios.

Also benefiting from the interest was Contact Energy, which rose 5c to 407 after an 8c jump yesterday.

There was also good interest in Fletcher Building, which ended steady on 343.

Trading interest in meat company Richmond continued to tail off after news that Graeme Lowe's Lowe Corp appeared to have acquired enough stock to block the PPCS bid at $3.05/share.

The shares fell another 10c to $2.65 this morning on general sentiment that the current PPCS offer would fail unless it was revised upwards.

Another takeover target, Goodman Fielder, rose 5c to 188 as prospects for Burns Philip's bid proceeding improved. The Takeovers Panel gave its nod to the Burns Philp bid but the latter said it had not decided if Goodman had breached the bid conditions following Goodman's revelations yesterday about tax losses and debt covenants.

Analysts had been worried Burns Philp may lower its bid or even pull it.

Investment company BIL was also steady at 52 after Channel Islands company Orb confirmed it was not going to follow through on prior interest in BIL's stake in British hotel chain Thistle at this stage.

Air New Zealand held steady at 53 cents. After the market closed, United Airlines announced it was pulling out of New Zealand, probably improving Air New Zealand's profitability as it takes up the slack, but possibly lowering the prospects of its tie-up with Qantas getting past competition watchdogs because the pair will now have a monopoly to North America.

Auckland Airport, which said the move did not have major financial ramifications, rose 2c to 542.

Among other movers, AMP rose 15c to 1240, Fisher & Paykel Healthcare rose 10c to 940, Lion Nathan fell 6c to 585, and Tower fell 2c to 223.

There were 39 falls and 40 rises among the 122 stocks traded.

- NZPA