NZ stocks: Shares storm ahead following stellar night offshore

12.00pm

The New Zealand sharemarket charged ahead this morning, buoyed by a solid night in offshore markets.

The benchmark NZSE-40 capital index topped the psychological 2000 barrier for the first time in a week, trading up 26.38 points, or 1.33 per cent, at 2013.526 by just after 11am.

The top-10 index was just under 2 per cent stronger at 891.62.

"It was a huge night offshore," ASB Securities dealer Andrew Kelleher said.

"The big question is, was it a bear market rally or has the worm turned? I still believe that it'll take a little bit more for people to be convinced that it's not just a bear market rally, but it has been pretty impressive, particularly in Europe."

European shares posted their biggest one-day percentage gain in at least 15 years on Monday, closing at their highs as investors cast off their inhibitions after recent intense selling and tracked a firmer Wall St.

The FTSE Eurotop 300 index ended up 5.9 per cent at just over 959 points -- its biggest one-day percentage gain in some 15 years, surpassing the previous record of 5.8 per cent set on October 1987.

The large cap Euro Stoxx 50 fared even better, jumping 6.9 per cent to 2723 points, although chartists said the index needed to break above 2906 to enter a positive trend.

Here, Telecom led the local rally, trading up 12c at 490. The stock made up the lion's share of total market turnover worth $16.7 million, with 1.6 million Telecom shares worth $7.5 million changing hands.

Among the other leaders, Auckland Airport was up 6c at 417, Baycorp Advantage added 10c to 435, Carter Holt Harvey was up a cent at 186, Contact Energy rose 4c to 386, Fisher and Paykel Healthcare climbed 15c to 825, its Appliances cousin was 10c higher at 880, Fletcher Building added 4c to 274, Ports of Auckland jumped 5c to 650, Sky City rose 3c to 636 and The Warehouse leapt 15c to 715.

Rises outpaced falls by 58 to 12 among the 101 stocks traded so far.

Fletcher Forests was steady at 24c as speculation mounts over the outcome of a vote on its proposed $1.4 billion bid to re-purchase the collapsed Central North Island Forestry Partnership.

High profile investors Bruce Sheppard, of the Shareholders' Association, and Stephen Hurley, former Forests director and head of 7.6 per cent shareholder Xylem Investments, oppose the deal.

"It'll be interesting to see how that pans out in the next day or two in terms of what people who are holding the stock on a speculative basis do -- whether or not they take this Xylem thing to heart," Mr Kelleher said.

" (Xylem) are a high proportion of the people that are needed to vote against a couple of the resolutions given the fact that some people can't vote. You only need 20-odd per cent of the total vote to be able to vote down a couple of the resolutions.

"They don't need to collect too many votes around them to be able to stymie the deal."

United Networks added 8c to 908 after Vector Ltd said it has applied for Commerce Commission approval to buy all or part of the electricity lines company.

In the United States, stocks roared higher in heavy trading overnight, propelling the blue-chip Dow to its third-largest point gain ever, after last week's recovery helped unleash a flood of bargain hunters betting the ravaged market is poised for a turnaround.

The Dow Jones Industrial average rocketed 447.49 points, or 5.41 per cent, to 8711.88. The Nasdaq Composite Index soared 73.13 points, or 5.79 per cent, at 1335.25, scoring its biggest percentage gain in nearly ten months. The Standard & Poor's 500 Index jumped 46.12 points, or 5.41 per cent, to 898.96. The broad index ended last week up 0.6 per cent after three straight weeks of declines.

- NZPA