NZ stocks: Market likely to follow Wall St recovery

The sharemarket looked likely to gain some relief from Wall St today, as the still jittery US markets recovered from the WorldCom accounting scandal.

Just after 11am, the NZSE-40 capital index had risen 5.48 points to 2078.84 on turnover of $12.7 million.

On Wall St stocks raced to their biggest gains in almost two weeks, soothed by a government report that the US economy was growing faster than previously thought.

WorldCom's admission that it had inflated its results by nearly $8 billion provided an opportunity for investors to snatch up beaten-down shares, helping the Dow Jones average up 149.81 points or 1.64 per cent to 9269.92.

Back in New Zealand, where markets yesterday all but ignored the US crisis, telcos were doing well. Market bellwether Telecom led, rising 2c to 498 on $3.8 million, and Australian telco Telstra was up 6c to 530.

"You've got sentiment arm-wrestling fundamentals at the moment and sentiment's winning the battle, so that's the driver of direction for us at the moment," said JB Were senior investment adviser Peter Stokes.

"Certainly we're pretty much in the Dow Jones watching mode, where for some time we've been able to move under our own steam."

Because it was the end of the financial year this week, brokers were not expecting a lot of activity, "but I think there's enough good news over the last 12 hours to see us keep our head above water".

New listing Skellmax steamed back to approach its issue price, up 3c to 113.

Fisher & Paykel Healthcare rose 11c to 830 after plunging to a new low of 800 earlier this week.

Gains were fairly widespread this morning including Sky City up 2c to 625, Lion Nathan up 7c to 559, Baycorp Advantage up 5c to 425, Guinness Peat Group up 3c to 169, Tranz Rail up 3c to 313 and Sky TV up 4c to 440.

Falls included Independent News Ltd, down a cent to 374 , and BIL International, down 2c to 64.

Rises outnumbered falls 28 to 22 on 102 stocks traded.

Meanwhile in the US, other Wall St markets also took a more positive turn, with the broader Standard & Poor's 500 Index rising 17.11 points, or 1.76 per cent, at 990.64. The technology-laced Nasdaq Composite Index rose 29.89 points, or 2.09 per cent, to 1,459.22.

- NZPA