NZ stocks: Shares follow overseas markets higher

New Zealand stocks moved higher in morning trade today following gains on offshore markets overnight.

At 11.30am the NZSX-50 gross index was up 7 points or 0.33 per cent to 2228.71, while the NZSX-40 capital index was up 5 points or 0.11 per cent to 2145.30.

"Generally it's opened on a positive tone following on obviously from the overseas markets", said ABN Amro Craigs Equities retail advisor Bryon Burke.

In New York US stocks rallied yesterday as investors took comfort from the Federal Reserve's widely expected decision to keep US interest rates at historic lows, lifting hopes that low rates would help spur the current economic recovery. The Dow Jones industrial average ended up 118.53 points, or 1.25 per cent, at 9567.34, its biggest percentage gain in more than seven weeks.

In London, retailers helped push Britain's top share index to a fresh one-year high and Japan's TOPIX stock index closed at a 15-month high.

Back in New Zealand, Mr Burke said Telecom had met its US closing price. Telecom was up 4c to 502 by 11.30am.

Meanwhile Fletcher Forests remained the focus of attention. This morning the company's stock gained 4c to 125 after a second bid was announced last night for the company's forest assets.

New Zealand-based consortium Kiwi Forests Group emerged with a $750 million cash and shares bid for Fletcher's 106,000ha forestry estate.

The offer is $65 million more than the clean, cash-only deal Fletcher Forests struck on Monday with The Campbell Group, a United States timber management company.

Market speculation has it that the agreement with The Campbell Group includes a $10 million break fee.

Mr Burke said the two bids at a similar level supported Fletcher Forests' current share price.

With both offers valuing the companies shares at the $1.30 - $1.40 level "punters are obviously paying up to the $1.24 level thinking there's still some money in it", Mr Burke said.

Elsewhere, stocks to move by 11.30am included: Air NZ down a cent to 54, Auckland Airport up 4c to 657, BayCorp Advantage up 6c to 261, Briscoe Group up 2c to 182, Fisher & Paykel Appliances up 2c to 1472, Fletcher Building down a cent to 410, Guinness Peat Group down a cent to 167, Hellaby Holdings up a cent to 496, Independent Newspapers up 2c to 452, Ports of Auckland up 5c to 785, Restaurant Brands down 3c to 124, Richmond up 5c to 300, Sky City up 4c to 875, Tower Group up a cent to 122, and the Warehouse up 4c to 525.

There were 33 rises and 20 falls on 111 stocks traded by 11.30am on turnover of $17.9 million.

- NZPA