NZ stocks: Air NZ turmoil fails to daunt resilient market

12.15 pm

The sharemarket was thrown another curve ball this morning, when trading was halted in Air New Zealand shares for the second time this week.

The Stock Exchange took the step pending clarification on comments by an Air NZ director and chief executive of Brierley Investments, a 30 per cent stakeholder in the troubled airline.

David Fergusson, a broker with Greenslades, said a halt to trade was commendable in the circumstances.

"The Stock Exchange is doing a good job of trying to keep the market informed," he said.

"We're getting a tremendous number of calls from mum and dad investors wanting to put $1000 into Air NZ and obviously, we can't tell them a lot at this stage."

Without Air NZ the market showed resilience even though market leader Telecom continued a mediocre run. At 11am Telecom was down 2c to 445 on the back of a turnover worth more than $9.36 million.

The NZSE-40 rose 14.97 points to 1863.74, about 0.8 per cent.

Mr Fergusson said Telecom had also fallen on Wall Street, despite a rise in the Dow. He felt this was partly due to negative comments about Marconi, a British-based telco and residual concern about a cornerstone Telecom shareholder, Verizon, reducing its shareholding.

But he also believed Telecom had "weathered the storm pretty well".

Sky City was a rising star, up 41c to 1130. The stock was enjoying a "nice run" after going ex-dividend on Monday and already buying pressure was growing.

Fletcher Building was another stock "holding up well". It was up 10c to 260 as it announced the partial sale of its Cyclone fencing business to Tru-Test Ltd.

Listed healthcare provider ElderCare New Zealand was up just 0.1c to 12.5 as the market digested news that the company planned to raise over $10.5 million in new equity from existing shareholders and institutional investors.

There would be a 1/7.5 renounceable rights issue.

Other stocks on the upside were Baycorp up 55c to 1070; Auckland Airport up 5c to 340; Brierley up 5c to 33; Fisher and Paykel up 30c to 1235; Independent News down 5c to 305; and the Warehouse up 6c to 602.

There were 39 rises and 23 falls on 108 stocks traded.

On Wall Street, investors flocked to health and industrial shares in the hopes they would be more recession-proof. The Dow Jones industrial average rose 114.03 points, or 1.33 per cent, to 8681.42. So-called "defensive" stocks pushed the index up on to higher ground. Drug company Merck and Co and Minnesota Mining and Manufacturing, also known as 3M, contributed 40 points to the Dow's gain, while Exxon Mobil Corp. added another 17 points.

The broad Standard and Poor's 500 index rose 11.57 points, or 1.15 per cent, to 1018.61, boosted by oil stocks.

The tech-heavy Nasdaq Composite shed 3.33 points, or 0.23 per cent, to 1460.71.

- NZPA