NZ stocks: Rise despite Telecom's misery

The New Zealand sharemarket rose today even though the share price of market heavyweight Telecom languished near an all-time low set yesterday.

The benchmark NZX-50 index closed up 19.727 points, or 0.616 per cent, at 3220.686. Overall there were 47 rises and 46 falls among the 110 stocks traded, on turnover worth $79.5 million.

Telecom rallied early in the day and traded as high as 218, but by the close was up 1c at 215, just off the all-time low of 213. Telecom has a 10.84 per cent weighting in the NZX-50, according to Reuters data, second behind Fletcher Building on 13.18 per cent.

"Telecom trading was just ebbs and flows of the market," said James Lee, head of wholesale equites at First NZ Capital. "The broader market is higher and Contact Energy and Flecther Building are leading the charge."

Brokers have said investors are worried that Telecom's earnings outlook implies lower dividends for the next few years. Some are switching to other high-yielding utilities.

Retailer Kathmandu rose 19c, or 8.68 per cent, to 238 after reporting first-half sales rose 27.5 per cent and an increase in profit.

Mr Lee said the market was expecting earnings before interest and tax of $13.5m and it came in at $15.5m. "It was a better-than-expected result through good cost control and good revenue growth," he said.

"All-in-all it was one of the better retailing results," he said.

Fletcher Building rose 19c to 832 and Contact Energy rose 4c to 603.

The Warehouse gained 2c to 386, and Freightways rose 6c to 312, while Auckland Airport slipped 4c to 191.

Air New Zealand was unchanged at 132 ahead of a release today that detailed a restructuring of its trans-Tasman and Pacific services.

Smartpay rose 0.3c to 4.1 after saying it had signed one of its biggest deals to date to upgrade Mitre 10 New Zealand's point of sale payment system.

Horizon Energy fell 35c to 340 and Pan Pacific Petroleum fell 1c to 30.

NZOG rose 1c to 158 on a day in which its $1.3 billion Kupe joint venture gas project in Taranaki was officially opened by Prime Minister John Key.

In the United States, stocks gained, pushing the Dow to a 17-month high, after a benign February inflation reading supported the Federal Reserve's renewed pledge of low interest rates.

A seven-session winning streak for the blue-chip Dow is the longest since an eight-day run in August 2009, when it rose 4.9 per cent. In the last seven sessions, the Dow has gained 1.7 per cent, but volume has been lacklustre.

The Dow Jones industrial average gained 0.5 per cent to end at 10,733.67, the Standard & Poor's 500 Index rose 0.6 per cent to 1166.21, and the Nasdaq Composite Index advanced 0.5 per cent to 2389.09.

- NZPA