NZ stocks: Gain despite Telecom drag

The New Zealand sharemarket posted its fifth straight gain today amid further positive company results, despite Telecom's continued drag on the market.

The benchmark NZSX50 index closed up 19.09 points, or 0.6 per cent, at 3183.24, following an eight-point gain yesterday.

"A positive dull day. Trading activity still seems to be quite light as a number of investors are reasonably uncertain with the general direction of the market," said Hamilton Hindin Greene partner Grant Williamson.

The reporting season had been pretty good overall, although expectations had been fairly high.

The day's standout performer was children's clothing company Pumpkin Patch, which boosted interim profit by 50 per cent to $14 million as it benefited from cutbacks in the United States in favour of expansion elsewhere.

Pumpkin Patch shares closed up 9c, or 4.5 per cent, at 209, having earlier hit their highest point in two years at 210.

Telecom, which tried to rally earlier in the day on bargain-hunting, closed unchanged at 219.

"There still looks to be plenty of selling in the Telecom market as investors digest the news about their new mobile system and a number of nervous investors decided to hop out," Mr Williamson said.

Telecom has been criticised over failures in its new XT mobile system, for which it is reimbursing customers $10 million.

Among other top stocks, Contact Energy fell 4c to 619, Fletcher Building was up 4c at 797, Sky City gained 2c to 319, and Auckland International Airport rose 3c to 190 on the back of positive passenger volumes in January.

Vector rose 6c to 204 after last week's result and news of possible involvement in the $1.5 billion fibre upgrade in Auckland.

Discount retailer The Warehouse rebounded 12c to 390, recovering from weakness following disappointing sales figures in January.

Stock exchange operator NZX fell 5c to 199 after news that February trading numbers were up 12 per cent.

Guinness Peat Group rose 3c to 90, carpet maker Cavalier gained 4c to 270, Mainfreight lost 2c to 588 and Steel and Tube fell 13c to 252.

Australian stocks were up 0.7 per cent, cutting earlier gains after the Reserve Bank of Australia raised interest rates to 4 per cent.

In the US, stocks rose for a second straight day, boosted by news that British insurer Prudential would buy American International Group's insurance unit in Asia for US$35.5 billion ($50.75b).

- NZPA