NZ shares feel weight of Australia

The New Zealand sharemarket inched up about half a per cent today as it continued to feel the weight of the Australian market, still reeling from news of a tax on the key mining industry.

The benchmark NZX-50 index closed up 17.66 points at 3298.02, having fallen around 6 points yesterday.

The index failed to reflect the 1.4 per cent rise for top stock Telecom, which closed up 3c at 220 ahead of its quarterly result on Friday.

"Australia and their poor performance is still weighing on our market to a degree -- their mining tax has really knocked the Australian market and possibly stopped ours from being even firmer today," Hamilton Hindin Greene director Grant Williamson said.

"Even the large swings we're experiencing in the offshore markets are not having a huge influence on the local board. I think investors really are a little bit uncertain on what to do at the moment, so the majority just seem to be sitting tight," he said.

Among blue chips, Fletcher Building was up 2c at 840, Contact Energy gained a cent to 629, Infratil rose 2c to 173, and Sky City fell a cent to 315.

Air New Zealand lost 3c to 131 after yesterday's news the airline was seeking approval for a tie-up with Australian rival Virgin Blue.

Stock exchange operator NZX closed flat at 180 after its operational report for April showed trades were up 2 per cent due to increased trading activity in debt securities, but the total value traded was down 11 per cent.

PGG Wrightson shares were up 2c at 55, recovering after news that a large parcel of shares owned by Rural Portfolio Investments and Rural Portfolio Capital were among assets put in the hands of receivers.

Shares in home fragrance company Ecoya, which debuted yesterday at the issue price of 100, recovered a cent lost in the meantime to close at 100.

Australia's S&P/ASX 200 Index was down 0.9 per cent at 4744.

Earlier in the US, transport stocks had their best day in six months following an industry report that the US manufacturing sector grew in April at its fastest pace in almost six years, and as UAL agreed to buy Continental Airlines to create the world's largest airline.

- NZPA