Fletcher Building leads stocks higher

Fletcher Building, Steel & Tube and Cavalier Carpets shares soared and Tower shares plunged as investors assessed the implications of Saturday's destructive earthquake in Canterbury on the corporate sector.

Brokers said at times the reaction was knee-jerk as Tower's losses will be limited to $3.5 million after-tax because of re-insurance, and the flow of work for builders will be over a period of time.

Many companies issued statements detailing the impact on their assets in the quake zone and banks moved to offer support packages to customers.

The benchmark NZX-50 index closed up 35.713 points, or 1.149 per cent, at 3143.142 as global equity markets rallied on the back of a better-than-anticipated US payrolls report on Friday.

Fletcher Building, the country's biggest building firm, rose 39c to 814 and Steel & Tube rose 17c to 237.

"The market has chosen to anoint Fletcher Building and Steel & Tube and Tower was beaten down," said James Lee, head of institutional equities at First NZ Capital

Tower closed down 6c at 185 and traded as low as 175.

Telecom continued a strong run after dropping a dividend last week, closing up 4c to 209.

Mr Lee said reconstruction will mean more concrete and steel is needed.

"There is a huge amount of work to be done but the timing of it is far from certain," he said.

He said Fletcher Building has rallied from around 717 in mid-July.

"At these sorts of levels it is implying the economy is going to get better," he said.

There was good volume in Fletcher Building and Goodman Property. Goodman Property rose 1c to 95 after reporting its portfolio was largely unaffected by the earthquake.

Cavalier Carpets rose 8c to 264. Property for Industry, which has two properties in Christchurch, fell 1c to 114.

The Warehouse was unchanged at 365, Mainfreight was unchanged at 680. NZOG rose 4c to 124 and Nuplex rose 8c to 330. Methven rose 2c to 158. Goodman Fielder rose 2c to 175.

Hellaby fell 22c to 183 and Ebos fell 6c to 680.

Allied Farmers rose to 2.8c after saying it had been awarded $3.5 million from a receivership of a development in Beverley Hills, California.

In the US, The Dow Jones industrial average shot up 127.83 points, or 1.24 per cent, to 10,447.93, marking a move back into the black for the year. The Standard & Poor's 500 Index gained 14.41 points, or 1.32 per cent, to 1104.51. The Nasdaq Composite Index rose 33.74 points, or 1.53 per cent, to 2233.75.

- NZPA