NZ stocks: Market nudged upward by overseas sentiment

12.00pm

The New Zealand sharemarket made a tentative step up in morning trade today, lifted slightly by positive sentiment from offshore markets.

At 11.30am the benchmark NZSX50 gross index was up 7.93 points or 0.38 per cent to 2113.80, while NZSX 40 Capital Index was up by 4 points or 0.20 per cent to 2071.22. Turnover was $32.8 million on 13.8 million shares traded.

First NZ Capital research manager Barry Lindsay told NZPA although the market was marginally better this morning after easing yesterday, a little more strength might have been expected given the continued improvement on equity markets overnight both in Europe and the US.

On Wall St, stocks rose to session highs in late afternoon trade yesterday as the market gave a cautious welcome to a Federal Reserve report showing no big change in economic conditions.

The Dow Jones industrial average rose 95.86 points, or 1.06 per cent, to 9150.75 while the broader Standard & Poor's 500 Index was up 9.69 points, or 0.98 per cent, at 994.53.

In Europe Britain's top shares ended a two-day skid and the leading FTSE 100 index ended 37.1 points or 0.9 per cent higher at 4150.1. European stocks ended near five-month highs.

Mr Lindsay said New Zealand was not participating fully in the improved sentiment from overseas.

"That's been anticipated to some extent because the earnings outlook is not all that powerful for a number of our companies due to the state of the economy and the strength of the NZ dollar which is a negative for exporters or those with trading operations offshore."

On a stock-specific basis Mr Lindsay said market interest had once again turned to Tranz Rail after the announcement this morning that Australian suitor Toll Holdings was planning a fresh takeover bid by the end of the week.

"There again the market is not convinced that it's going to be a knockout blow." At 11.30am the stock was up 4c to 95.

Elsewhere, BayCorp Advantage was a notable improver this morning.

The stock had been under pressure yesterday on rumours the company faced litigation in Australia. This morning Mr Lindsay said the stock had made "a pretty powerful recovery" as investors reacted to the company's denial of the rumours. Baycorp Advantage stock rose by 15c to 170 in early trade.

Other stocks to rise by 11.30am included: Affco up a cent to 21, AMP up 6c to 566, Fisher & Paykel Appliances up 8c to 1295, Fisher & Paykel Healthcare up 20c to 1150, NZX up 9c to 399, Promina up 2c to 248, Richina up 3c to 35, Sky City up 4c to 874, Telecom up 5c to 511, and The Warehouse up 3c to 445.

Stocks which fell included Air NZ down 2c to 50, Fletcher Building down a cent to 370, Infratil down 2c to 200, Restaurant Brands down a cent to 148, Tower down 3c to 153, and Westpactrust down 15c to 1775.

There were 28 rises and 25 falls on 99 stocks traded.

- NZPA