NZ stocks: Market rebounds on back of rallies offshore

12.00pm

The New Zealand sharemarket indulged in a minor relief rally today, although turnover was characteristically light.

By mid-morning the NZSE-40 capital index was up 14.28 points, or 0.72 per cent, at 1990.38, on turnover of 7.30 million stocks valued at $16.14 million.

The New Zealand market was bolstered by a rebound in markets offshore, with the European market clawing back from a 5-1/2 year low, Britain's FTSE gaining ground, and markets in the United States also showing signs of a rebound.

"There was a bit of a rally this morning, which was predictable -- Europe was higher after series of down days, it was a bit of a relief," Alan Wills of Forsyth Barr Frater Williams said.

"There's not very strong buying ... a bit of strength throughout the leaders though -- Telecom, Carter Holt Harvey, which were sold off quite a lot yesterday."

Telecom was up 5c at 482, while Carter Holt gained 5c to 161 on news its US-based 50.5 per cent owner International Paper, the world's No 1 forest products company, was likely to post third-quarter earnings in line with expectations.

Fletcher Building also rose, up 6c at 295, as the effects of its share placement earlier this month continued to wash through the market.

On September 19 Building said it had placed 43.7 million shares at a price of 295 each, well ahead of most analysts' expectations. The $129 million capital raising will help pay for its $761 million purchase of Australian building products firm The Laminex Group.

"Fletcher Building is bouncing around a bit ... with that large acquisition it's taking a bit of time for that stock to settle into its groove," Mr Wills said.

"We're very optimistic for the outlook, if international markets hold up, we expect Fletcher Building to trade higher."

Financial services giant AMP dropped a further 35c to 1355 at the open, following confirmation yesterday that AMP has proposals in place to support its troubled British subsidiary Pearl if the United Kingdom stock market fell to 3000.

Overnight the FTSE closed at 3696.

Elsewhere on the market, Auckland International Airport gained 3c to 436, Fisher & Paykel Appliances gained 6c to 1030, Sky City was up 12c at 720, The Warehouse gained 6c to 730, and Baycorp Advantage was up 5c at 360.

Publisher Independent Newspapers Ltd was up 3c at 310 after announcing yesterday Australia's Peter Wylie would step in as new chief executive, to replace Tom Mockridge who left INL two months ago to head Italy's pay TV company Stream.

F&P Healthcare lost 3c to 970 on light turnover, Australian telco Telstra lost 5c to 548, and Advantage Group lost 1c to 34.

There were 33 rises and 27 falls on the 96 shares traded.

On Wall St, the Dow Jones industrial average gained 158.69 points, or 2.07 per cent, to 7841.82, to recover from a four-year low the day before; the broader Standard & Poor's 500 Index advanced 20.34 points, or 2.48 per cent, to 839.63; and the technology-laced Nasdaq Composite Index climbed 40.09 points, or 3.39 per cent, to 1222.26.

- NZPA