NZ stocks: Market rallies after yesterday's collapse

6.30pm

The New Zealand sharemarket staged a cautious recovery today following yesterday's September 11-reminiscent rout.

The benchmark NZSE-40 capital index added 8.59 points to 1983.97, clawing back just under half a per cent of yesterday's near 3 per cent fall.

Turnover was heavy with shares worth $132.5 million changing hands -- $75 million of that in yesterday's horror story Telecom.

The telco added 18c to 490, recouping almost 4 per cent of yesterday's 10 per cent fall, as investors digested a warning that Telecom's first quarter profit -- due out next week -- will be about 15 per cent lower than analysts' forecasts.

"I think people have had a bit of a reality check here today that Telecom is guiding people towards a full year number that isn't going to be too far different from expectations and that this is just a quarter that had some seasonal adjustments in it," ABN Amro Craigs retail equities adviser Nigel Scott said.

Insurer and fund manager Tower also staged a relief rally, recovering 20c to 190.

"The market is awaiting further clarification of their position and fundamentals before they can make some decisions on the stock going forward," Mr Scott said.

Elsewhere in the market activity was mixed.

Retailer Briscoe Group added 8c to 264 after it said its sales in the October quarter were up 20 per cent to $64.2 million on a year ago.

The shares rose as much as 14c to 270 earlier in the session.

Among the other leaders Carter Holt Harvey added a cent to 172, Baycorp Advantage rose 9c to 330 and brewer Lion Nathan jumped 11c to 606 ahead of tomorrow's annual result -- picked to reveal a 14 per cent profit rise.

Energy companies Natural Gas Corp and Powerco were not so lucky, as a shakedown of the gas industry looms.

The Government today requested an inquiry into claims that gas pipeline owners, operating as monopolies, are reaping excess profits. It has asked the Commerce Commission to report on whether more regulatory controls should be imposed -- a process that could take up to two years.

NGC shares were 7c weaker at 137, while Powerco eased 4c to 161, against a year low of 160 and a high of 208.

Other stocks to lose ground included Auckland International Airport, down 13c at 515; Fisher and Paykel Healthcare, down 10c at 1080; Fisher and Paykel Appliances, down 2c at 1084; INL, down 15c at 310; Sky City, down 5c at 760; and Sky TV, down 3c at 350.

Falls outnumbered rises by 49 to 36 among the 125 stocks traded.

"The marketplace had a very damaging day yesterday -- you just don't recover from that overnight. The market is going to take a bit of time to recover from the beating that really came out of nowhere from Tower and then Telecom," Mr Scott said.

- NZPA