NZ stocks: Telecom and energy stocks lead market up

6.50pm

A strong showing by Telecom, coupled with a buzzing energy sector, led the sharemarket to a six-week closing high today.

The benchmark NZSX-50 gross index gained 12.69 points to 2780.29, while the NZSX-All capital index was up 3.11 points to 926.36.

Top stock Telecom rose 5c to 586 on turnover worth $36.89 million. ABN Amro Craigs broker Matt Willis said the telco was back to trading on fundamentals after hitting a rough patch a couple of weeks ago.

There were 69 rises and 51 falls among the 159 stocks traded today, amounting to total market turnover worth $85.58 million.

NGC helped energise the market, gaining 7c to 307. The rise came on the back of news the High Court has cleared the way for Vector to make a bid for NGC. Mr Willis said Vector was unlikely to be the only company eyeing up NGC.

"I don't think they will be the only interest party out there and ...it will be a competitive process. But certainly the market is starting to price in the likelihood of a realistic bid for 100 percent of the company," Mr Willis said.

Contact Energy also headed north today, climbing 8c to 595. Mr Willis said Origin's takeover documents, including an independent valuation, are on their way to shareholders. While Origin's offer is not expected to be high enough to attract much support, Mr Willis said the valuation was likely to value the shares higher than the current market price.

Meanwhile, fellow energy stock TrustPower rose 4c to 464, while Powerco was up 1c at 206.

The news of the day was the High Court ruling against a proposed $550 million alliance between Air New Zealand and Qantas. The airlines were appealing an earlier Commerce Commission ruling, which blocked the proposed alliance, saying it would have lessened competition and led to higher airfares.

Air NZ was in a trading halt for much of the day, but rose 2c to 187 when trading resumed this afternoon."If it was unexpected news then no doubt the market would be down in that stock," Mr Willis said.

Clothing retailer Postie Plus was also on the up today, gaining 5c to 100, on the back of a $4.02 million July year net profit. Postie Plus also announced a fully imputed final dividend of 4.06c per share,

Fisher & Paykel Healthcare lost 15c to 1465, as profit takers cashed in on the 115c gains the stock made last week.

Other stocks on the move today included: Carter Holt Harvey up 2c at 231, Tower up 2c at 208, NZX down 5c at 815, Michael Hill Jewellers up 9c at 685, Steel & Tube down 7c at 428, The Warehouse up 6c at 427 and Hallenstein Glasson down 5c at 335.

- NZPA