Stocks enjoy false dawn as Paper exits

The exit of Fletcher Paper provided the sharemarket with a false dawn yesterday, sending prices spiking up as investors readjusted their portfolios.

"It was relatively quiet most of the day," said David Price at Credit Suisse First Boston. "There were quite a few adjustments to indices because you had Fletcher Paper falling out. So that weighting of Fletcher Paper was being redistributed among other stocks within certain different indices.

"You saw buying across the board and some stocks had a reasonably healthy day. I think what you will see is some of the heady rises we saw on the day probably given up next week.

"So I think some of the closes may be just a little bit of an anomaly.

"Next week we kick off the results season and that's really what will drive the market from here," Mr Price said.

Fletcher Paper bowed out at the Norske Skog bid price of 250, up 1c. The only other Fletcher group mover was Forests, up 1c at 87. Fletcher Energy was the second most active stock after Telecom, with $13.2 million worth of shares traded.

One of the few stocks where other factors may have been involved in the price movement was Contact Energy, which lost 6c to 270. The planned departure of its chief executive, Paul Anthony, is creating a bit of uncertainty, according to Mr Price.

"Obviously there is time for them to find a replacement but people have commented that he has done a good job.

"In the past we have seen when people have been removed stocks go up because they have done a poor job - this was the flip side."

The NZSE-40 capital index closed 13.22 points, or 0.63 per cent, higher at 2113.23 on high total turnover value of $129 million, of which Telecom accounted for nearly $36 million. Rises outstripped falls by 64 to 37. Carter Holt Harvey added 4c to 187, AMP 57c to $22.40, and Lion Nathan 5c to 495.

INL jumped 18c to 410, Sky TV 5c to 420, and Fisher & Paykel 10c to 735.

Baycorpjumped 27c to $11.97 - just short of its $12 record. Brierley grew 2c to 39 and Auckland Airport 10c to 289. Nufarm dived 21c to 440.

- NZPA