NZ stocks: Global sharemarket rise boosts NZSE

A sharp rise in United States stocks, which saw the Dow Jones Index rally above 10,000 points for the first time in months, shunted the New Zealand market higher today.

By mid-morning Telecom had maintained its 16c rise to 516, a three month high, on turnover of almost $5 million. Telecom has added nearly $2 billion in market capitalisation since hitting an eight year low six weeks ago.

Total turnover was a quiet 4.44 million stocks, valued at $12.13 million, and the NZSE-40 was up 1.24 per cent, or 25.35 points, at 2074.69.

Stephen Wright of ASB Securities said northern hemisphere sharemarkets had rallied, and he expected the Australian and Asian markets to follow suit today.

US investors were betting on a quick recovery after a report, the National Association of Purchasing Management's non-manufacturing index, showed a sharp snapback in the key US services sector.

Better-than-expected reports on personal spending, the manufacturing sector and construction earlier in the week also fanned optimism.

"In New Zealand our economic outlook is pretty good anyway, we really haven't had the fall that other countries had, so it's just going to get better," Mr Wright said.

"Cyclical (stocks) are strong, but it's going to be a broad rally across all sectors. Half the commentaries are negative but on the other hand there is certainly a lot of liquidity, and obviously that's because of low interest rates, and that's what the US Fed's been trying to do.

"I think our market will continue for a while yet," he said.

Telecom's 3 per cent rise this morning was alongside Carter Holt Harvey's 6c gain to 172, Fletcher Building's 3c rise to 285, and Telstra's 7c gain to 675.

"Telecom obviously has been threatening to move. The jury's still out on how well (Australian subsidiary) AAPT's going to go - return on capital is minimal over there, but their domestic figures were good," Mr Wright said.

The Warehouse, up 13c at 678, is performing strongly with the Christmas shopping season in full swing. Yesterday's interest rate cut in Australia was also likely to provide some support for consumer spending across the Tasman, where The Warehouse is trying to increase market share.

French food giant Groupe Danone's extension to its takeover offer for drinks company Frucor had little impact on its price, with Frucor shares down 1c at 238.

Danone extended the deadline until January 4 from December 21 but said its offer price was unchanged at $2.35 a share.

Air New Zealand A shares were unchanged at 33c and the Bs up 1c at 34 after a report yesterday that the Government's valuation of the airline was fair and reasonable, but that the company remained vulnerable despite the extra cash.

"You're still not seeing institutional support or analyst support, most would still be negative at these sorts of levels, but as the report was saying earnings can be leveraged on 1 per cent up or down in load factors, yield factors ... it's just too early yet for rational investment in Air NZ," Mr Wright said.

Elsewhere on the market, Fisher and Paykel Healthcare was down 15c at 1750 and Appliances was up 2c at 984. In the, US F&P Healthcare was up 13c at $US29.13 ($NZ70.99).

Baycorp rose 6c to 1106, Auckland Airport was up 4c at 377, meat exporter Richmond rose 10c to 250 and casino operator Sky City was up 5c at 645.

Tower, which reported a $77.2 million profit for the September year, near the top of the range of analysts forecasts, lost 1c to 525.

There were 38 rises and 9 falls on the 92 stocks traded.

On Wall Street the Dow, in the biggest gain since October 3, jumped 220.45 points, or 2.23 per cent, to close at 10,114.29; the Nasdaq climbed 83.77 points, or 4.27 per cent, to 2046.87; and the broad Standard and Poor's 500 index jumped 25.55 points, or 2.23 per cent, to 1170.35.

- NZPA