NZ stocks: Market opens higher, unfazed by election result

12.00pm

New Zealand shares were mildly positive this morning as investors largely ignored a "status quo" election result that returned incumbent Labour to power.

The benchmark NZSE-40 capital index was 1.92 points, or 0.10 per cent, higher at 1961.93 by 11am. The index plunged to a fresh low for the year on Friday as pre-election jitters and negative offshore markets weighed on investor sentiment.

Turnover was light, with just six million shares worth $20 million changing hands so far.

"It's a pretty quiet open so far," ABN Amro Craigs retail equities adviser Nigel Scott said.

"I think people are relieved that the vote is out of the way and it's relatively status quo. The slight dampening of the Greens' effort, which might have changed the economic situation as far as the sharemarket is concerned has been not nullified, but it's very much a wait and see approach because there are other options."

Labour gained 52 seats, or 41.3 per cent of the vote, which, with the two seats secured by coalition partner the Progressive Coalition Party, means it needs to negotiate with either the Greens or the centrist United Future Party to govern in the 120 member parliament.

Peter Dunne's United Future stormed into parliament with nine seats, up from one in the last election, while the Green Party increased its influence only slightly, with eight seats from seven previously.

The Greens had threatened to increase their support to 10-12 seats in early polls -- which unnerved businesses unhappy with their anti-genetic engineering, anti-free trade stance.

The family-focused United Future is a more palatable alternative to the Greens, whose policies include imposing a carbon tax as well as buying back the national rail network and power company Contact Energy.

Among the leading stocks today, Telecom was up a cent at 464 on shares worth $8.4 million, Auckland Airport rose 5c to 415, Briscoe Group slipped 5c to 235, Contact was 1c lower at 380, Fletcher Building was flat at 270, Sky City rose 2c to 618, The Warehouse slipped 5c to 700 and Tranz Rail was 3c higher at 213.

Rises outnumbered falls by 28 to 23 among the 98 stocks traded.

Genesis Research was untraded at 230 after reporting a wider $5.26 million loss for the half year to June 30.

Fletcher Forests was unchanged at 24c after 7.6 per cent shareholder Xylem last night said it will vote against a $1.4 billion proposal to buy the Central North Island Forest assets with former partner Citic.

United Networks Ltd firmed 5c to 900 after announcing it had short-listed bidders to due diligence for the purchase of the company. UNL, the country's eleventh-largest company by market capitalisation, is seeking buyers for all its shares or assets because its majority shareholder, United States networks company Aquila Inc, is seeking to exit the company.

UNL declined to name the bidders, but Natural Gas Corp said earlier this month it had applied for regulatory clearance to acquire the gas network assets, while Powerco has also expressed an interest.

NGC was steady this morning at 116, as was Powerco at 187.

Mr Scott said that with the election out of the way, the focus would turn towards offshore markets and the reporting season which begins next month.

"People are still very much concentrating on global markets to see if the volatility settles down and then they can make some decisions going into the reporting season.

"The currency stayed the same and that will be a key thing also."

The Kiwi was worth US46.48c by 10am, up from a US46.27c low in New York on Friday.

In the US, stocks finished higher after a topsy-turvy session on Friday and the Dow index was up for the week as investors looked through a battered market for bargains, including Microsoft Corp.

The blue-chip Dow Jones industrial average logged its best weekly gain since mid-May. But traders are still wary of nasty surprises after a roller-coaster week that saw stocks at five-year lows on record trade volumes amid a cloud of worries over corporate profits and accounting scandals.

The Nasdaq Composite Index rose 22.04 points, or 1.78 per cent, to 1261.73. The index gained back nearly half of its losses Thursday. The broad Standard & Poor's 500 was up 14.16 points, or 1.69 per cent, to 852.84. The Dow Jones Industrial average rose 78.08 points, or 0.95 per cent, to 8264.39.

- NZPA