NZ stocks: Quiet sharemarket relieved US stocks steady

12.20 pm

The New Zealand sharemarket breathed a sigh of relief today after stocks held their ground in the United States overnight.

The market also reacted positively to last night's news that immediate relief was in sight for Air New Zealand, although the proposed Ansett sale to Qantas would not address all of Air NZ's problems, JB Were broker Peter Stokes said.

By mid-morning the NZSE-40 capital index was almost unchanged, up 8.64 points or 0.44 per cent at 1960.45, on small turnover of 9.87 million stocks valued at $22.17 million.

Leading turnover was discount retailer The Warehouse, which bounced up 12c to 612 on $6.87 million worth of stocks traded, after several negative trading sessions.

"The US market had a breather, so I guess the good news is that that slide has been arrested, temporarily anyway. That's given our market a bit of breathing space and that's probably reflected in a rise in Telecom," Mr Stokes said.

Telecom gained 4c earlier this morning but by 11.30am was up 1c at 465.

Air NZ domestic A shares were up 3c at 75 and the freely-held Bs gained 4c to 92 after Air NZ chief executive Gary Toomey announced the Ansett fire sale last night following six days of crisis talks.

"The Air NZ shares are up as you would expect on the news of some progress overnight. The progress I would describe as removing some of the uncertainty, but it doesn't take away the issues that are facing Air NZ and I don't think it's until we see the (annual) results on September 13 that we see perhaps the size of the write-down on Ansett," he said.

"So that leaves questions about their trans-Tasman strategy and all the rest of it. I think you're seeing a knee-jerk reaction here in respect of some of the uncertainty being addressed. The rights-issue scenario hangs over this market, so I'd expect more volatility in the share price as we work through the outstanding issues."

The airline is expected to announce an operating loss in excess of $200 million, with Ansett's losses of around $300 million offsetting Air NZ's profits.

Elsewhere on the market, Baycorp was up 21c at 1240, Contact Energy rose 2c to 325, Tranz Rail gained 5c to 420, Ports of Auckland rose 3c to 555, Nuplex was up 15c at 315, Fletcher Building was up 3c at 263 and Fletcher Challenge spin-off Rubicon was up 3c at 71.

Hellaby Holdings rose 9c to 219 after announcing yesterday its June year profit rose 10 per cent to $12.9 million.

On the down side, casino company Sky City lost 6c to 1105, fishing company Sanford lost 4c to 646, Ports of Tauranga lost 4c to 726, Wilson Kettle was down 10c at 355 and Carter Holt Harvey lost 1c to 162.

There were 37 rises and 26 falls on the 116 stocks traded.

On Wall Street, the 30-stock blue-chip Dow Jones industrial average finished essentially flat, off 0.34 of a point, at 9605.51, after dropping more than 1 per cent earlier.

The broad Standard & Poor's 500 Index added 6.76 points, or 0.62 per cent, to finish at 1092.54 and the technology-laced Nasdaq Composite Index was up 7.68 points, or 0.46 per cent, at 1695.38.

- NZPA