NZ stocks: Shares extend New Year's gains as Telecom hits fresh high

The New Zealand sharemarket continued to rise today as the perky tone seen since the beginning of the year persisted.

At the 5pm closing bell the benchmark NZSX-50 gross index was 12.88 points or 0.52 per cent higher at 2509.18, while the NZSX-40 capital index was 9.40 points or 0.41 per cent higher at 2329.86.

Turnover was a healthy $118.97 million despite yesterday's public holiday in the US. Rising stocks outnumbered those falling 60 to 37 on 148 traded.

UBS Warburg head of research Richard Leggat told NZPA the market was pretty solid once again. "Generally you'd say tone still remains pretty healthy".

The sharemarket has enjoyed a lively start to the year, and Mr Leggat said that this was often the case in January.

"You do get strengths early in the year and then that can fade. We'll have to see how that turns out."

Forsyth Barr Frater Williams' David Price agreed. "You tend to find that January, fresh money comes in, and the market starts to rally," Mr Price said.

Much of the market's gains so far this year have been powered by market belwether Telecom's recent purple patch.

Today Telecom extended its gains, closing 3c higher at 563 after hitting a year high of 567 earlier in the session.

But Mr Leggat said the telco may soon run out of puff. "It's had a huge move. I wouldn't be surprised to see the shares meet a little bit more selling and drift back a little bit. But it's still up half a per cent on the day and volume was good.

On the other hand Mr Price said overseas buyers were still showing interest in Telecom and the stock was trading below his firm's valuation of 577.

But Mr Price said Telecom's "heady rises" recently would likely abate "until you get an announcement about increased yield or payout".

Fisher and Paykel Healthcare and sister company Appliances were also continuing their recent run higher on news last Friday that Healthcare had secured a potentially lucrative US deal.

Healthcare was up 7c to 1245, and Appliances was up 8c to 383.

Michael Hill's shares rose 6c to 498 today after the jewellery retailer reported same store sales rose a "pleasing" 5.1 per cent in the six months to December 31, and total sales rose 14.6 per cent to $139.54 million in the period.

The stock has risen 4 per cent from 480 at the start of the year but is down sharply from its 630 price a year ago.

Nevertheless, Mr Price said Michael Hill's Australian numbers looked "very positive".

Carter Holt Harvey continued to edge higher, closing up 2c at 204 after a late flurry of trading. Recent reports suggest the company is considering selling off its forestry assets.

Auckland International Airport found some support today after a string of modest losses over recent sessions.

Mr Leggat said the stock had "just drifted back on no particular reason or volume and had a nice little bounce today."

It closed 11c higher at 686 this afternoon.

Stocks to move higher today included: BayCorp Advantage up 2c to 328, Contact Energy up 2c to 560, Fletcher Building up a cent to 409, Freightways up 2c to 228, Independent Newspapers Ltd up 2c to 503, NZ Refining Co up 31c to 1651, Ports of Auckland up 6c to 786, Postie Plus up 3c to 108, Repco up 3c to 304, SkyCity Leisure up 8c to 135, TelstraClear up 3c to 571, and the Warehouse up 4c to 528.

Stocks to fall today included: Air NZ down a cent to 49, Mooring Systems down 5c to 280, and NZX down 10c to 600.

- NZPA