NZ stocks: Market sees broad rally as US markets strong

12.00pm

The New Zealand sharemarket piled on almost 1 per cent today following further gains on the United States markets overnight.

By mid-morning the NZSE-40 capital index was up 19.72 points, or 0.96 per cent, at 2083.37, while the top-10 index was up 12.13 points at 935.20.

Turnover of 11.02 million stocks, valued at $25.39 million, was topped by debt collector RMG's 2.69 million stocks.

The big news today was the Reserve Bank's hike in the Official Cash Rate -- the benchmark for mortgage and business lending rates -- from 5.25 per cent to 5.50 per cent.

Peter Stokes of JB Were said Telecom, up 5c at 506 by mid-morning, led the charge again today.

"I guess because there was a feeling there was the potential of a rise of 50 basis points today, and it was only 25, provided some relief to the market," Mr Stokes said.

"It was helped along by another strong US market, so there are two factors there that have provided a platform."

Telecom may have received some impetus from the Australian government's announcement yesterday it did not plan a further sell-down of its 50.1 per cent stake in Telstra before the 2003/04 fiscal year.

However, today's Independent Business Weekly said Telecom's share price was threatened by the large number of hedge funds that have short-sold the telco's stocks.

The funds sold 65 million Telecom shares they did not own for delivery at a later date, betting that Telecom's share price would fall between the sale date and the delivery date so they could collect a tidy profit.

Fellow market heavyweight Carter Holt Harvey was up 5c at 186.

"Carter Holt and Telecom are the two largest companies by market capitalisation, so if you get movement there it normally feeds through to a positive market," Mr Stokes said.

"The rallies seem to have reached to the broader market, it seems fairly broadly based. It's always nice to see the wider sentiment rather than just one or two stocks rising."

Fletcher Building gained 8c to 292 after it announced it planned to de-list from the US Nasdaq Exchange and would buy out small lot shareholders outside the United States.

Retailers received a boost after today's interest rate hike, with discount giant The Warehouse piling on 11c to 736, and Briscoe Group up 4c at 215.

Elsewhere on the sharemarket, Baycorp Advantage was up 16c at 445, Contact Energy gained 3c to 409, Fletcher Forests was up 1c at 21, Telstra was up 4c at 572, and Ports of Auckland gained 10c to 690. Sky Television was up 14c at 445 while major shareholder Independent Newspapers Ltd gained 10c to 380, Sky City casino gained 8c to 612, and AMP rose 31c to 2001 and Fisher and Paykel Healthcare was up 5c at 910.

On the down side, F&P Appliances lost 5c to 970, Auckland Airport lost 2c to 475, Nuplex was down 2c at 326, and UnitedNetworks lost 8c to 805.

Rises well outnumbered falls by 41 to 22 on the 105 stocks traded.

In the US, the Dow Jones industrial average jumped 189.24 points, or 1.87 per cent, to 10,298.90; the broader Standard and Poor's 500 Index was up 22.72 points, or 2.11 per cent, at 1097.28; and the technology-loaded Nasdaq Composite Index climbed 66.52 points, or 4.03 per cent, to close at 1719.06.

- NZPA