NZ stocks: Market firms further after strong showing yesterday

12.00pm

The sharemarket firmed further today after it put on a strong showing yesterday to snap a seven-day losing streak.

At noon, the benchmark NZSX-50 was up 6.43 points at 2460.06 while the NZSX-40 capital index was up 5.27 points at 2272.57.

Turnover was light at $24.5 million and there were 28 rises against 28 falls among the 105 stocks traded in the first 10 minutes.

Market leader Telecom was steady on 565 after rising 10c yesterday. Turnover was worth $10.3 million.

There was some relief at The Warehouse's vital Christmas quarter sales report today, which showed Red Shed sales rose 6.9 per cent on a like-for-like basis and total group sales were up 14.3 per cent.

The stock rose 1c to 511. However, the commentary with the report indicated the company has not solved all its problems, particularly in Australia where same store sales rose 3.5 per cent.

Founder and acting managing director Stephen Tindall said higher unit volumes and a push for increased market share had resulted in higher operating costs and pressure on margins.

He also commented that the group was continuing to have problems with its troublesome Australian unit.

"Although top line sales numbers are pleasing, we have experienced an unsatisfactory deterioration in gross margins in the quarter," Mr Tindall said of the Australian unit. He said it would take time to rectify the problems.

This year's star performer, NZX, continued its winning way, rising 14c to 680 and trading as high as 687, after it reported its maiden result.

The operator of the stock exchange posted a December year net profit of $2.94 million which compared with $1.91 million profit in 2002.

NZX, which listed last year at 430, started this year at 565.

Michael Hill turned around early weakness to jump 21c to 529 after posting a 27 per cent increase in half year net profit to $10 million. Sales revenue in New Zealand was flat but very strong in Australia.

Freightways, which yesterday produced a strong profit report, rose 6c to 245.

There were few other moves of note. Carpet maker Cavalier rose 10c to 520 despite the New Zealand dollar hitting near seven year highs overnight.

ANZ was one of the few other stocks in the top 50 to move more than 2c. It eased 3c to 1977. Fletcher Building rose 1c to 403.

The influence from Wall Street was slightly negative as stocks fell for the first day in three. Declines among health-care companies, some of this year's best performers, blunted the effect of a proposed US$4 billion ($5.8 billion) takeover in the networking-equipment industry on technology shares.

The Standard & Poor's 500 Index lost 2.95, or 0.3 per cent, to 1139.81, led by Pfizer Inc., the world's biggest drugmaker. The Dow Jones Industrial Average slipped 14 points to 10,579.03. The Nasdaq Composite Index fell 3.44 to 2060.57.

- NZPA