NZ stocks: Forestry stocks seesaw, market ends positively

Unexplained interest in Fletcher Forests helped the sharemarket into positive territory, despite a pullback in fellow forestry stock Carter Holt Harvey.

The NZSE-40 capital index closed up 1.72 points to 2007.89 on a moderate volume of $59.2 million.

Yesterday the Top 40 reached a two month high, underlining its 3.2 per cent gain in the last fortnight on New Zealand's economic strength and strong currency.

Today's best performer was Fletcher Forests whose head shares rose 7c to 108 on turnover of 906,00 shares, and preference shares were up 5c at 106.

Fletcher Forest's 17 per cent owner Rubicon rose 4c to 73.

Brokers were unsure what to put the rise down to. A share buyback is pending but First NZ Capital broker James Snell believed the stock had lagged the gains made by other forestry stocks, which have been buoyed by rising pulp and paper prices.

However, since Fletcher Forests was not a pulp player, Richard Leggat, head of research at UBS Warburg, suggested the rise could be based on a positive brokerage report.

ASB Securities broker Stephen Wright said there seemed to be no fresh news out on Fletcher but he noted buying in the US which sparked the rise.

"Everyone says Fletcher is too cheap ...but I think it's just a continuation of the overseas buying we've been seeing."

On the flip side, forestry giant Carter Holt Harvey retreated sharply from its recent rises, shedding 8c or 4 per cent to 183. Until today, the stock had climbed 20c in almost a month.

Mr Leggat felt the stock might have lost its gloss after a downbeat fourth quarter result from US counterpart Georgia-Pacific Group, the State's second-largest paper and lumber company.

Continued gains in the New Zealand dollar gave currency-sensitive stocks like Sky TV and the Warehouse a boost.

Sky TV, which buys its programmes in US dollars, rose 9c to 372 and its two-thirds owner, Independent Newspapers, rose 3c to 337.

The Warehouse, a major importer, gained 5c to 730 on heavy turnover worth $10.1 million, and Air New Zealand, which pays many of its costs in US dollars, held on to yesterday's gains at 56c.

Market leader Telecom was up 2c to 469 on $12 million worth of shares.

Other movers included Sky City Entertainment up a cent to 830, Port of Tauranga up 10c to 460, Turners Auctions down 5c to 275, and Contact Energy, down a cent to 409.

There were 45 rises and 40 falls among the 126 stocks traded.

The market received no direction from the US where stocks orbited the unchanged mark as investors braced for a slew of earnings reports due later in the week.

The Dow Jones Industrial average rose 1.09 points to 8786, while the tech-laden Nasdaq Composite ended with a loss 1.64 points, or 0.11 per cent, at 1,446. The S&P 500 Index fell 1.3 points, or 0.14 per cent, to 926.27.

- NZPA