NZ Stocks: Telecom, FCL Energy lead 2.8pc surge

New Zealand's top 40 stocks downed tools for Labour Weekend on a strong note, despite the inauspicious date.

The rally coincided with the 13th anniversary of Black Monday - the October 1987 stockmarket crash that wiped 508 points, or 23 per cent, off the US market in its worst-ever percentage loss.

The NZSE-40 Capital Index rallied 53.30 points, or 2.79 per cent, to 1963.04.

Total turnover was $121.3 million on 35.73 million shares, with NZ Refining leading turnover by value with $34.29 million on 3.42 million shares after Fletcher Energy sold its stake in the company.

Shane Gavegan of Deutsche Securities said the rebound on light volume was partly due to a rally in the US overnight and then in Asia.

"With the long weekend people were staying on the sidelines a bit," Mr Gavegan said.

"Telecom had a pretty good day, it rose 35c [to 585]. Continued speculation is that they are close to or have put a bid in for Cable and Wireless' mobile phone assets - the important thing is they have been linked in a joint venture with NTT DoCoMo [from Japan].

"If they go into alliance on this issue perhaps they are looking at doing other things as well, and the market has always wanted to see Telecom link with another player," he said.

"Fletcher Energy gained also - they sold the NZ Refining stake, and there is confidence that Shell is going to lodge another application to the Commerce Commission [to buy Energy] with revised terms."

Fletcher Energy jumped 28c at 864, Building was up 2c at 186 and Forests rose 1c to 36.

Sky TV was up 10c to 725, on the back of an announcement it will have 400,000 subscribers by year end. Part-owner INL also rose, up 10c to 355.

Telstra shot up 14c to 805 and Auckland Airport rose 10c at 290.

Contact Energy rallied 10c to 290, Genesis rose 15c to 670, Lion Nathan was up 10c at 485 and Ports of Auckland gained 4c to 387. Sanford was up 23c at 458, Tower rose 13 to 479, Tranz Rail gained 10c to 360 and The Warehouse was up 10c at 595.

On the down side, Colonial Motors shed 9c to 311 and Montana was down 2c at 310.

- NZPA