Stocks gain 1.7pc in broad-based rally

The sharemarket had a good tone yesterday with mid-cap stocks performing well and offshore selling easing, Merrill Lynch institutional sales vice-president Richard Leggat said.

The NZSE-40 Capital Index gained 36.44 (1.73 per cent) to 2141.76. Turnover totalled $103 million, with Telecom accounting for $34.4 million of that.

Rises outnumbered falls 79 to 23 among the 156 stocks traded.

Good quality mid-cap stocks such as Tranz Rail, Auckland Airport, The Warehouse and Baycorp had been performing strongly, which meant there was very good interest in the sharemarket, he said.

Offshore selling at the start of the quarter also seemed to have reduced somewhat, Mr Leggat said.

This followed a strong day on Wall St, where blue-chip stocks rose after Federal Reserve chairman Alan Greenspan raised hopes that interest rates would not rise further for now.

Locally, market giant Telecom traded 4.4 million shares to close up 20c at 778.

"Telecom moved higher again on reasonable volume, perhaps moving up in response to the modest spectrum auction in terms of prices - they look like being much lower than expected," Mr Leggat said.

Tranz Rail responded to a newspaper article suggesting major restructuring was in the wind, he said. It rallied 25c to close at 410.

Carter Holt Harvey was up 9c to 189 on turnover of four million shares worth $7.4 million.

"Carter Holt released sales figures on Tuesday and International Paper's result was good, suggesting Carter is going to be okay," Mr Leggat said.

Among the Fletcher stocks, Building was up 8c at 248, Forests gained 5c to 87 and Energy rose 3c to 712. Paper was unchanged at 247.

Fletcher Forests and Building both climbed on speculation they were takeover targets, Mr Leggat said.

Elsewhere on the market, Baycorp rallied 25c to 1190, Tower gained 18c to 520, and Sanford and TrustPower were both up 10c to 450 and 340 respectively.

Auckland Airport rallied 7c to 267, Advantage was up 9c at 269, Lion Nathan rose 5c to 500 and The Warehouse gained 7c to 595.

Among the few stocks to weaken, Sky TV closed down 5c at 390, INL was off 3c at 382 and Infratil was down 1c to 122.

- NZPA