NZ stocks: Market rebounds slightly

12.00pm

The sharemarket, led by heavyweight Telecom, staged a modest rebound today, encouraged by Wall Street's robust performance.

The NZSE-40 capital market was up 7.03 points to 1955.11 at 11.30am on volume worth $29 million.

Tranz Rail, which late last night reached an 11th hour crucial agreement with its bankers over the funding of the ferry Awatere, remained suspended. It said it needed to get an amendment to its rights issue prospectus approved and expected trading to resume at noon.

Trading was suspended yesterday when the company initially failed to reach an agreement with Citibank. It last traded at 128 after hitting an all-time low of 122 earlier this month.

Brokers expect it to trade lower.

"It just increases the risk in that you have a company with NZ dollar revenues and it has US dollar liabilities down the track," said UBS Warburg's Richard Leggat.

"I don't think the stock is going to go down much."

Mr Leggat said the fact that the deal wasn't nutted out until the eleventh hour was a surprise.

"It's never nice when you find the day before the rights issue is to be signed off that there is still a little fish-hook there."

Telecom, which yesterday slumped to its lowest level since July, rebounded 4c to 468 - 10c off its low for the year.

Cavalier Corp continued its great run this month, rising another 30c to 800. It has risen 27 per cent since it told shareholders on November 13 it was trading ahead of budget and planned a share split.

Baycorp was the other star of today's trading, up 11c to 244, and it is now up 54 per cent from the trough of 158 it slumped to earlier this month.

Contact Energy fell back 2c to 385 after yesterday's 14c gain on the back of its $107 million September year profit announced yesterday.

The result was down on the previous year's $131 million profit when Contact was a big winner from soaring winter wholesale electricity prices, but stronger than expectations of $100 million.

Auckland International Airport recovered some of yesterday's 11c fall, rising 3c to 540.

Carter Holt Harvey rose 2c to 170, Turners Auction was up 10c to 260, Dorchester was up 4c to 164, Genesis was up 5c to 160, and Ports of Auckland was up 10c to 630.

There were 39 rises and 22 falls among the 105 stocks traded.

On Wall St, stocks were buoyed by an upbeat revenue forecast from computer giant Hewlett-Packard and economic data pointing to a drop in weekly US jobless claims and signs of strength in manufacturing.

The Dow Jones industrial average shot up 225 points, or 2.6 per cent, to 8848 and the Nasdaq Composite Index gained 48 points, or 3.4 per cent, to 1468.

- NZPA