NZ stocks: Telecom surge propels market to fresh highs

A 2.4 per cent surge by market heavyweight Telecom today sent the sharemarket benchmark index 1 per cent higher to fresh highs.

The move was in stark contrast to Australia which went commensurately down and Wall Street which skidded south for the fourth consecutive day. Banking stocks dragged the market down across the Tasman.

Macquarie Equities broker Rob Gwyther said the easing of the kiwi dollar attracted buying from overseas, particular in Telecom which jumped 14c to 599, a level not seen since May 2001.

"But there is support across the market," Mr Gwyther said.

At least two brokers have recently put out favourable reports on Telecom including Citicorp which has increased its target price on the stock to $6.50. Mr Gwyther said people were focusing on the prospect of a one-off dividend.

Investors are also anticipating big dollops of cash coming into the market via possible takeovers for Contact Energy and Powerco.

The benchmark NZSX-50 gross index closed up 27.67 points at a new record of 2734.83, while the NZSX-All capital index rose 10.06 points to 917.65.

Pumpkin Patch had a "spectacular" 13c rise to a new closing high of 150. The company announced that improved trading across all its market would result in a net profit of $7.5-8m against the prospectus forecast issued just two months ago of $4m.

There was solid turnover in number two stock Carter Holt, which closed up 2c on an eight-week high of 221 ahead of an expected strong half-year result on Thursday.

Fellow forest products company Tenon rose 2c to 191.

Fisher & Paykel Appliances rose 10c to 467 on confirmation that it is spending $4m to expand its Dunedin dishwasher factory to meet solid demand.

Sky City Entertainment jumped another 8c to 494 to add to yesterday's 11c gain. Yesterday the company completed its Darwin purchase but brokers said it was mainly rising as investors chased its 9 per cent yield.

Fletcher Building continued its erratic, but upward trending path, rising 11c to 481 today despite housing data out yesterday suggesting the steam is coming out of that market.

Steel & Tube added 7c to yesterday's 8c gain following yesterday's profit upgrade. It closed on 435.

The Warehouse lifted further off its recent trough, rising 7c to 417 to add to yesterday's 4c gain.

On the downside, Michael Hill dropped 17c to 593 on what brokers said was profit taking. Westpac NZ fell 15c to 1790 in sympathy to the pounding dished out to National Australia Bank. ANZ, however, rose 8c to 1998.

Trustpower, which is likely to be affected by the Bay of Plenty floods, fell 10c to 460 to add to yesterday's 10c fall.

Contact Energy fell 1c to 594 with investors there still on tenterhooks. Air New Zealand also fell 1c to 40c.

The small stocks index went against the trend, dropping 25.60 points to 7233.16 in contrast to the top 10 index, which rose 1.5 per cent, 16.94 points, to 1126.93.


Pacific Retail shares closed unchanged on 210 after the group said it had scotched its planned float of its main retail brands and instead opted to sell to Retail Investments Group (RIG) for $138.5 million.

RIG, established by Sydney-based Gresham Private Equity, has agreed to conditionally buy the Noel Leeming, Bond & Bond and Big Byte retail brands, PRG said in a statement.

Hellaby Holdings jumped 13c to 520, a new high for the company.

The Rural Portfolio Investments-controlled Wrightson rose 4c to 143.

Sky TV fell 9c against the trend to 505.

Among the smaller stocks, Nuhaka fell 10c to 470 and Taylors Group fell 5c to 270.

Total market turnover was a healthy 46 million shares, worth $143.8 million, of which half of that was in Telecom.

There were 58 stocks which ended up and 53 down among the 159 traded.

- NZPA