NZ stocks: Market edges up but uncertainty saps interest

Global uncertainty continued to plague the New Zealand sharemarket today, although it made a lukewarm recovery from yesterday's slide.

The NZSE-40 capital index was up 4.82 points to 1875.38 on turnover worth $71.5 million. The index sank 1.7 per cent yesterday to its lowest level since the post-September 11, 2001 trough.

New Zealand investors were following a global trend of sitting on the sidelines based on Iraqi war worries and a stuttering international economic outlook, brokers said.

"People would rather just move away at the moment and a lot of this will be an overstatement ... Any sort of firmness out of the US regarding the war, etc, we will see a sharp, fast bounce in markets," said Sam Macdonald of Direct Broking.

"Maybe not so much in our market, but there'll be a big short-covering rally and we will see markets pick up quickly. But I think that could be some time away."

Australian traders were capitalising on the lack of interest, selling ahead of the results of even reliable companies because they believed they could easily cover their positions afterwards, Mr Macdonald said.

Today's bounce was led by Telecom, which ended up 2c to 426 after revisiting yesterday's 16-month low of 424 earlier in the day. Trading in Telecom made up $27 million, more than a third of the total turnover.

The Warehouse, another stock to take a beating yesterday, recovered 9c today to 540.

Star performer Sky City Entertainment soared another 27c to 872 following its strong half year profit result yesterday.

Brokers said investors were "flocking" to the stock, which was a strong yield player and appeared to have plenty of room for more growth.

But other stocks announcing results this week were being "hammered" even if their result was in line with expectations.

Port of Tauranga fell 20c to 400 despite an 18 per cent rise in half year profit of $14.5 million, a strong result as expected.

Tourism Holdings was up 2c to 109 after announcing a slightly better than expected half year profit of $5.2 million. The company is postponing a balance sheet restructuring due to international uncertainties, which brokers said would make the operating environment difficult for the tourism company.

Jeweller Michael Hill International was down 10c to 490 following an interim profit result which dropped 1 per cent due to a stronger New Zealand dollar and start-up costs in Canada.

And AMP tumbled to a fresh record low of 798, down 27c, after announcing a record net loss of $A896 million ($NZ971.27 million) and warning that the group's profit would fall again in 2003 if equity markets continued to slide.

Meanwhile, Auckland Airport rose 13c to 543 and Air New Zealand was flat at 51c, ahead of their results tomorrow.

Market expectations for Air New Zealand's first half profit might be better than the forecast $90 million, said Mr Macdonald. But everyone was expecting a solid result from Auckland Airport, also reporting tomorrow, "and if that result is in line, it will get sold off".

"When the market's in a bearish state, people won't sit on a position unless it's an absolute winner. They'd rather have it in cash."

Independent Newspapers rose 5c to 314 after yesterday's readership survey figures that were seen as a good result. It lifted 4c yesterday against the weak market.

Carter Holt Harvey fell a cent to 167, depressed by the gloomy outlook for cyclical stocks, while Fletcher Building fell 7c to 343.

There were 30 rises and 51 falls among the 128 stocks traded.

New Zealand's market reflected a positive night on Wall St, as investors picked bargains from beaten down shares.

Investors snatched up select technology shares such as Hewlett-Packard, the world's largest computer maker, which reported a higher quarterly profit after the close.

The market's mood also improved after Amgen Inc., the world's biggest biotechnology company, gave an upbeat forecast.

The blue-chip Dow Jones industrial average gained 51.26 points or 0.65 per cent to close at 7909.50. The broad Standard & Poor's 500 Index rose 5.99 points, or 0.72 per cent, to 838.57. The tech-laced Nasdaq Composite Index added 6.60 points, or 0.50 per cent, to 1328.98, after falling more than 2 per cent.

- NZPA