NZ stocks: Telecom rebound lifts major indices

A rebound in market heavyweight Telecom's shares today was behind both major indices making mild gains.

The benchmark NZSX-50 gross index was up 12.21 points at 2184.18 at 5pm, while the NZSX-40 capital index was up 11.81 points at 2112.50.

Telecom was up 7c to 496, having traded $41.8 million worth on turnover of 8.5 million. Yesterday, the telco closed at a three month low of 489.

The market traded $91.6 million worth on turnover of 29.7 million. Among the 133 stocks traded were 45 rises and 39 falls

ABN Amro Craigs operator Matt Willis said there were no surprises in Telecom's performance.

"I think the (Telecom) weakness over the past couple of weeks can be attributed to the Vodafone news," he said today.

"It looks like the 3G (broadband) issue has been brought forward perhaps by a year, to a year-and-a-half," he said.

Telecom would probably have to embark on building its own 3G network in the short term as well, he said.

The market had been concerned that the capex required to build such a network by Telecom would put any review of its dividend policy on hold.

"Our view is that Telecom can do both," Mr Willis said.

In other sharemarket news today, Sky City Entertainment fell 14c to 899 after posting an 88 per cent rise in net profit to $107 million.

Sky's result was better than the most optimistic forecasts by analysts.

Mr Willis said the drop in Sky's share price could be pinned to market forces.

"That's often the case with a share that's had a good run - it's been bought, perhaps, on the expectation of an even better result," he said.

Other movers included: AMP up 12c to 547, ANZ Bank up 10c to 1990, Cavalier down 4c to 505, DB Breweries up 15c to 700, Fisher & Paykel Appliances up 4c to 1430, F&P Healthcare up 10c to 1230, Fletcher Building up 6c to 419, Northport down 4c to 306, NZX up 9c to 475, and The Warehouse up 4c to 495.

Trading activity is expected to be quiet all week, with many market players taking vacation in the last week of August.

The blue-chip Dow Jones industrial average finished down 31.23 points at 9,317.64. The Nasdaq Composite Index edged down 1.01 points to 1,764.31, while the broader Standard & Poor's 500 Index inched up just 0.65 points to 993.71.

- NZPA