NZ stocks: Market prices in decision to hold interest rates

6.40pm

The sharemarket barely got out of first gear today, comforted by the news it would not have to worry about an interest rate rise just yet.

At 5pm, the benchmark NZSX-50 ended up 4.56 points at 2366.564 on a mediocre $76 million turnover, while the former benchmark NZSX-40 capital index rose just 0.991 points at 2208.712.

Market watchers were apprehensive that the Reserve Bank would lift its official cash rate (OCR) from 5.0 per cent, a move which would probably bolster an already strong currency and hurt exporters.

Brokers said today's decision to hold off a rates rise was largely priced in.

"The thing is, the market's going to be saying it didn't happen now but it's going to happen in a month's time," said Forsyth Barr Frater Williams broker Suzanne Kinnard.

However, the decision had a positive effect on interest rate-sensitive stocks like Fletcher Building which rose 4c to 399.

Index leader Telecom rose a cent to 513 -- a stock which has been steadily gaining strength on more positive sentiment.

The stock varied from 509 to 515 during the session. "It can be very currency-driven," Ms Kinnard said. "There's certainly good support there at the moment."

"One of the things underpinning our market at the moment is the amount of cash coming back into the market, particularly from the NGC and News & Media repayments of recent times," noted ASB Securities broker Ian Witters.

"Some of that money is looking for homes at the moment."

The largely Australian-owned banking sector also enjoyed a positive day -- Westpac rose 20c to 1680 and ANZ gained 49c to 1970. Australia decided to raise interest rates yesterday.

Fletcher Forests edged up 2 cents to 133, a cent off its year high.

There was little other corporate news but Auckland Airport climbed another 8c to 673 as the company reported improved passenger numbers.

However, Tourism Holdings Ltd, which runs vehicle rentals and tourist attractions, failed to gain any advantage from the news, dropping 3c to 142.

Weather-beaten retailer The Warehouse Group sank another 5c at 507, still affected by negative sentiment about its Australian unit.

It was a better day for fellow retailer Briscoe Group, up 3c to 171 despite announcing last night that its full year net profit might be fairly flat.

Casino operator Sky City peaked early at 467 but ended down 5c to 455 after the passing of smokefree legislation.

Other movers included transport firm Owens Group; up 7c to 112, Vertex up 9c to 140; and Sanford up 17c to 555, whose profit result showed high currency gains but low earnings.

"I think there's still expectations that this company is still going to deliver," Mr Witters said.

There was $89,197 worth of shares traded on the New Zealand Alternative Exchange this morning.

Overseas, the Dow Jones was up 81 points at 9935, the Standard & Poor's 500 Index was up seven points at 1073, while the Nasdaq Composite Index was up 15 points at 1995.

- NZPA