Strong start on sharemarket

The New Zealand sharemarket started the day strongly after sharp rises on stock exchanges in the United States and Europe.

Contact Energy shares were up 6c to $6.08 early as they continued to head up after dropping to a five-month low of 563 a week ago. A 10c lift took Fletcher Building to $7.80, equal to its highest level of the past fortnight, while a 4c lift took Telecom to $2.48, just below the month high of $2.49.

Around 10.15am the benchmark NZX-50 index was up 24.58 points or 0.8 per cent to 3174.39, after slipping 4.4 points yesterday.

Allied Farmers shares edged down 0.1c to 9.9c early as Hanover Group investors continued selling their 1.9 billion new shares in the company, after the stock price fell by a third yesterday.

Allied Farmers chief executive Paul Macfie described as "crucial" for shareholder confidence a special board meeting being held today to form a strategy for the group in the immediate future following the Hanover deal.

It was apparent from the road show meetings that many Hanover investors did not hold shares elsewhere and were perhaps uncertain about what to expect from a public company, Macfie told Radio New Zealand today.

"It's crucial that they get to hear exactly what the plans are, and feel some comfort around that because they have to make some decisions about what the do with their shares."

It was clear many of the new shareholders just wanted to cash up, but those keen to hold out and look hopefully for some recovery next year, would need to know what the company was doing, Macfie said.

Among other early share movements today Cavalier Corp gained 6c to $2.75, Mainfreight rose 5c to $5.70, NZ Refining Co added 5c to $3.65, Property for Industry was up 4c to $1.21, The Warehouse lifted 3c to $4.10, and Steel & Tube gained 3c to $2.75.

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In the United States, stocks mounted a broad advance after a key healthcare reform bill advanced in the Senate and brokerages upgraded Dow components Intel Corp and Alcoa Inc on improving profit prospects.

Based on preliminary data, the Dow Jones industrial average closed up 0.8 per cent at 10,414.14, the Standard & Poor's 500 Index gained 1.1 per cent to 1114.05, and the Nasdaq Composite Index climbed 1.2 per cent at 2237.66 - its highest close in 15 months.

- NZPA