NZ stocks: Rate cuts spark big surge

The New Zealand sharemarket had a cracker day on the heels of a big performance in US markets that were spurred by a surprise rate cut from the US Fed.

The key NZSE-40 capital index closed up 2.57 per cent, or 53.10 points, at 2119.67 on excellent turnover of 45.21 million, valued at $112.21 million.

The small companies' NZSE-SCI capital index gained 8 per cent, or 40.49 points, to close at 5089.79.

Sam Macdonald, of DF Mainland, said the Fed's unexpected 50 basis point cut provided the catalyst for sharemarkets around the world to pile on the points.

The Reserve Bank's own 25 basis point interest rate cut yesterday morning had a steadying influence.

Telecom had huge turnover as technology stocks around the world benefited from computer company Intel's better than expected result and the Nasdaq's 156.4 point, or 8.13 per cent, rise to close at 2079.62.

Telecom, up 36c at 642, had $67.74 million worth of turnover.

"We opened pretty strongly. Across the board it was an excellent day, as good as they get," Mr Macdonald said.

Carter Holt Harvey was up 13c at $1.89, no doubt making its chief executive, Chris Liddell, happy, Contact Energy rose 4c to $3.03, The Warehouse rose 19c to $6.19, Tower was up 13c at $5.55 and United Networks gained 10c to $8.35. Tech stock Advantage Group was up 8c at 87c and Genesis rose 7c to $4.09.

Rises outnumbered falls 77 to 25 on the 144 stocks traded.

There was a boost for Air New Zealand shares, which have been punished for subsidiary Ansett Australia's grounding of 10 planes and safety concerns that look likely to soak up billions of dollars.

The domestic Air NZ A shares closed up 8c at $1.07, and the B shares rose 10c to $1.56 on expectations that the first of Ansett's 10 grounded planes would return to the sky.

"Short term anyway they have [turned a corner]. The Air NZ A shares hit a low of 88c earlier in the week. I don't think we'll see those levels again," Mr Macdonald said.

" Going forward I think the stock might still remain under a bit of pressure until such times as the funding issues are sorted out."

Carter Holt performed well despite its lower than expected fourth quarter result of $19 million, well down on the first-half which registered quarters of $90 million and $86 million.

The country's largest forest owner reported an annual profit for the March year of $237 million, up 17 per cent on the previous year.

"Even though you could say there is a tough year ahead, I think a lot of people look at CHH and say, well, cyclically pulp and paper prices, we might have seen the lows there," Mr Macdonald said.

He said the market also appeared comfortable with Mr Liddell's management of the group.

Auckland-based fishing exporter Sanford was pummelled, falling 35c to $6.05, after posting a worse than expected net first-half profit of $12.1 million, down from $19.7 million for the same period last year.

Other stocks to fall included Auckland Airport, down 2c at $3.59, Restaurant Brands, down 1c at $1.36, and Scott Technology, which fell 3c to $1.32.

On Wall Street, along with the Nasdaq's fourth-biggest gain in percentage terms in its 30-year history the blue-chip Dow Jones industrial average jumped 398.91 points, or 3.9 per cent, to 10,615.64.

- NZPA