NZ stocks: Market reverses as early gains after mixed Wall St session

12.00pm

By late morning the New Zealand sharemarket reversed early gains despite the release of several pieces of market-beating corporate news.

After opening up 0.19 per cent, the benchmark NZSX-50 gross index fell 0.02 per cent to 2180.06, while the top-40 was down 0.03 per cent at 2105.64.

Gareth Stythe of JB Were said the market was generally positive despite reflecting market leader Telecom's 1c fall to 529.

Tourism Holdings Ltd (THL) rose 7 per cent, or 9c, to an 18-month high of 135 after surprising the market with its upgraded full year net profit forecast of around $7.5 million.

"THL came out with a profit downgrade in March because with Sars and the Iraq war they expected lower tourist volumes, but they were obviously surprised at how quickly tourist numbers bounced back," Mr Stythe said.

Waste Management also dished out a positive surprise this morning, gaining 5c to a two-year high of 370 after its first half net profit was up 23 per cent at $8.5 million.

"It beat market expectations by about 5.5 per cent -- the market was expecting an $8.1 million net profit,' he said.

Following yesterday's positive fourth-quarter and annual sales figures, The Warehouse reversed an early 7c gain to trade down 3c today at 487.

Sky TV gained 2c to 472 on small volume, Baycorp Advantage was up 5c at 169, Restaurant Brands was up 1c at 133, and Promina rose 3c to 271.

Infratil gained 3c to 222 despite the dismissal of its complaint to the Takeovers Panel about Toll's bid for Tranz Rail, which in turn was down 1c at 98.

Financial services company Tower was down 1c at 122 on news yesterday that Guinness Peat Group increased its stake to 17 per cent from 11.65 per cent, having taken up a shortfall in the $211 million four-for-three rights issue.

Tower shares topped turnover with 1.89 million stocks changing hands worth $2.33 million.

Mr Stythe said the level of shareholders who picked up their rights -- 80.1 per cent -- was positive.

"That is quite good considering the dire couple of years that Tower has had, to have 80 per cent of shareholders put more money towards the company is reasonably positive."

GPG has to reduce its stake to 13.75 per cent in line with the terms of its underwriting agreement.

On the down side, meat company Affco lost 1c to 21, Mainfreight was down 1c at 134, casino company Sky City shed 2c to 920, and Turners Auctions was down 1c at 339.

Turnover was light, with 8.68 million stocks changing hands valued at $19.44 million.

On Wall St the Dow Jones industrial average ended up 25.42 points, or 0.28 per cent, at 9061.74; the Standard & Poor's 500 Index rose 1.62 points, or 0.17 per cent, to 967.08; and the Nasdaq Composite Index fell 20.82 points, or 1.24 per cent, to end at 1652.68.

- NZPA