NZ Stocks: Contact stands out in solid bounceback

The New Zealand sharemarket top 40 bounced back 35 points, or 1.9 per cent, yesterday to 1913 after large losses last week.

Total turnover was $69.35 million on 26.21 million shares, of which Telecom made up more than one-third ($24.12 million) followed by Lion Nathan ($11.52 million).

Rises outnumbered falls 78 to 25 on 139 shares traded.

Cavill White equities dealer Richard Burton said the NZSE-40's upward move was expected, but breaking back through the 1950 mark would be difficult.

"The market had quite a good performance but you would have to say the standout performance was Contact, up 11c to 276. It had a strong jump, as did Auckland Airport (up 9c to 280) which was to be expected - it was sold down when the market was sold down and it's a good quality defensive stock," Mr Burton said.

"People thought the market was oversold but technically the market's broken through its support at 1950, and the next support's 1750. It's got a long way to go to break back up - if you were a technician you would think the market is technically looking pretty sick,"' Mr Burton said.

"Our market is not overpriced - the stocks aren't expensive and a lot of them are carrying quite good dividend yields - and that is why it bounced back so quickly today," he said.

"But we are at a time when the economy's contracting and firms subject to domestic markets will find it difficult.

Brewer Lion Nathan said its annual profit for the year to August 31 rose 6 per cent to $A130.2 million ($NZ174.6 million). It closed up 10c at 490. The company said the momentum from the Australasian brewing businesses should be maintained in the 2001 fiscal year in the absence of any significant changes to the environments in the markets in which it operated.

There was not much movement among the Fletcher stocks, which had a volatile week last week.

Fletcher Energy, which had accounted for much of Friday's slump in the leading indices after the Commerce Commission rejected Shell's takeover bid, shed 4c to 810. Its US investment, Capstone Turbines, closed down a couple of dollars at $US47.75 on Friday. Building rose 4c to 194 and Forests rose 2c to 44.

Telecom gained 14c to 535, The Warehouse rose 20c to 600, Sky City gained 20c to 710, Genesis rose 25c to 655, and Baycorp was up 18c at $12.30.

DB was up 9c at 314, Fisher and Paykel gained 3c to 705, New Zealand Refining rose 15c at $11.70 and Montana rose 6c to 300. Carter Holt Harvey gained 5c to 162.

Air New Zealand A shares were down 7c at 168 after going ex a 9c dividend, Trustpower was down 5c at 300 and Ports of Tauranga lost 10c to 540.

Telstra ordinary shares lifted 25c to 805 while T2 instalment receipts - which ceased trading at the end of business yesterday - were 10c higher at 390.

The NZSE-SCI small companies index rose 47.09 points (0.95 per cent) to 4994.10.

In New York on Friday, stocks rebounded strongly with the Nasdaq composite index up more than 240 points. The Dow Jones index closed up 157.60 points at 10,192.18 points, a marked contrast to its 379-point plunge on Thursday - its fifth-worst day ever in terms of point declines.

The Nasdaq surged 242.09 points, or 7.87 per cent, to 3316.77 points - the Nasdaq's third-highest one-day point gain and second highest one-day percentage gain.

- NZPA