Buoyant overseas sentiment drives stocks higher

File photo / NZ Herald

The sharemarket started the week on the front foot as positive international developments outweighed weak economic data here.

Strong commodity prices, the resignation of Egyptian President Hosni Mubarak and strength in the United States market drove many markets higher yesterday.

The NZX-50 index closed up 16.03 points, or 0.47 per cent, at 3383.47. Turnover was worth $74.2 million. There were 66 rises and 39 falls among the 118 stocks traded.

"The market is just following Australia and the overnight rally in markets," James Lee, head of institutional equities at First NZ Capital, said.

The strength came even though reports of weak sales by retailers at Christmas were backed up by official data yesterday showing a decline in retail sales in December.

Lee said the weakness in retail sales data was expected, while BNZ's economists said the data did not deny the likelihood that an improvement was occurring this year.

Express mail company Freightways rose 7c to $3.27 after its half-year result released yesterday included a strong second quarter.

Guinness Peat Group fell a cent to 76c and good volume continues to trade in the stock after it signalled a capital return and break-up plan on Friday.

Lee said the company's distribution process was under way and the shareholder base was changing.

"Shareholders who are there for the longer term upside are getting out and the guys with the arbitrage positions are getting in. GPG is no longer a long-term story," he said. Telecom rose 5c to $2.21 even though Communications Minister Steven Joyce was quoted on businessday.co.nz warning against assuming Telecom would secure the bulk of the contract to roll out ultrafast broadband to urban centres.

Mainfreight fell 5c to $8.10, Xero gained 5c to $2.65, while Fisher & Paykel Healthcare was down 5c to $3.03.

Fletcher Building rose 9c to $8.25, Auckland Airport rose 1c to $2.23 and ANZ rose $1.09 to $33.91.

Infratil rose 2c to $1.94 on a day Infratil Energy Australia disclosed the purchase of a generation site in New South Wales.

Kathmandu rose 5c to $2.16, Michael Hill fell 1c to 89c, Contact Energy rose a cent to $6.24 and The Warehouse rose 2c to $3.55.

- NZPA