NZ stocks: Market fails to capitalise on Wall Street surge

6.00pm

The New Zealand sharemarket had few stand-outs today despite a decent run from Wall St last night.

The benchmark NZSE-40 capital index rose 2.88 points, or 0.15 per cent, to close at 1949.01, while the top-10 index was up 0.13 per cent at 876.88.

Sam Macdonald of Direct Broking said Tranz Rail saw some heavy turnover, with the market prepared to support the stock around the 100 mark.

Tranz Rail head shares closed unchanged at 101 on volume of 1.18 million stocks, while its rights were down 1c at 26 on turnover of 1.69 million stocks.

Tranz Rail's head shares have been adjusted down to reflect the rights which began trading on Monday. Rights holders have to pay 75c to convert the rights to full shares.

"I think the market is still cautious, but the buying volume has been picking up as the market sees that the worst could be possibly over," Mr Macdonald said.

Market leader Telecom was up 2c at 477, on turnover of 3.82 million shares.

"You'd think you'd see a bit of increased buying strength in Telecom on the back of a 5c dividend (record date) tomorrow. It appears we have had a bit of index buying on the market, which has in turn supported Telecom," he said.

Blue chip casino operator Sky City was down 15c at 750 following its dividend payout on Monday, while pay television operator Sky TV was up 5c at 330.

Retail giant The Warehouse lost 12c to 708 as the market sold the stock down on news it would not pursue expansion into Chile.

The Warehouse told a briefing yesterday that it would consider looking beyond Australia and New Zealand for growth opportunities.

However, it "strongly" reiterated today that it would not expand into Chile, Mr Macdonald said.

Dow Jones Newswires also reported that First NZ Capital had downgraded The Warehouse to neutral after lowering its earnings outlook for the Australian business in the next two years.

First NZ Capital's 12-month price target was 850 per share, still above its current price.

Elsewhere on the market, Auckland International Airport dropped 1c to 515, Baycorp Advantage rose 1c to 216, Carter Holt Harvey was up 4c at 169, Fisher & Paykel Appliances rose 15c to 1070 and F&P Healthcare gained 9c to 1040.

Fletcher Building was up 3c at 322 following positive building data yesterday, Telstra gained 8c to 508, Independent Newspapers Ltd shed 5c to 290, and Contact Energy fell 4c to 386.

There were 43 falls and 38 rises on the 127 stocks traded.

"Considering the Dow had such a great run (in the US) our market was pretty lacklustre," Mr Macdonald said.

"After a very good night on Wall St, our market and the Australian market are just lagging a bit. I think there's still a bit of a follow-on from recent earnings disappointments which is just hamstringing our market at the moment."

On Wall St, which closes for Thanksgiving overnight, the Dow Jones industrial average leaped 256.35 points, or 2.95 per cent, to 8932.77, hitting its best level in more than three months.

The technology-laced Nasdaq Composite Index jumped 44.17 points, or 3.06 per cent, to 1488.59, and the broad Standard & Poor's 500 Index climbed 25.65 points, or 2.81 per cent, to 938.96.

- NZPA