NZ stocks: Sharemarket strengthens during morning trading

12.25 pm

The New Zealand sharemarket opened sharply higher today and trading was brisker after better performances on world sharemarkets overnight.

Most major markets - except Tokyo and Hong Kong - closed with double or three-figure gains.

"It's a pretty strong old market today and quite a lot of that is on the back of Telecom," Geoff Brown at J P Morgan Chase said.

The market continued to strengthen during the morning and at 11am the NZSE-40 index stood at 2079.57 - up 19.41 points - or 0.94 per cent - after an opening 2075.01.

The NZSE-SCI capital index was 23.66 points - or 0.43 per cent - higher, at 5483.27, after an opening 5479.45.

Turnover at 11am was 14.63 million shares, worth $29.65 million and of the 113 traded, 31 rose and 16 fell.

The main stocks giving the thrust were Telecom, Contact Energy and Rubicon, Mr Brown said.

Rubicon was 7c higher at 70 and was topping turnover at 11am with 3.17 million shares worth $2.19 million.

After the market closed yesterday, it announced it had sold the Challenge petrol network to Caltex for $50 million, having sold a fuel terminal business in Brisbane in May for $23 million.

Rubicon made a $53 million profit on the two sales and said last night it intended to return $60 million capital to shareholders.

Lion Nathan was 5c lower at 544 after today being ordered by the Montana Standing Committee to sell 19 per cent of its shares in Montana that were declared defaulter securities.

Lion holds 62 per cent of Montana and the decision opens the battle for control of New Zealand's premier winemaker.

British winemaker Allied Domecq has 27 per cent and still wants full control.

"The decision is that all of Lion Nathan's securities in Montana are 'Defaulter's Securities'," the committee statement said.

Montana Group rose 23c to 505.

Market heavyweight Telecom - which has a 22 per cent weighting in the Top 40 index - was 15c higher at 556 on turnover of 799,346 shares, worth $4.39 million.

Telstra also rose 15c to 680 on turnover of 180,480 shares worth $1.20 million.

Contact Energy was 3c higher at 299 on turnover of 920,858 shares worth $2.80 million and power company, Trustpower was a cent lower at 365.

Fishing company Sanford continued its good run with a rise of 8c to a record 695 after Wednesday's 25c gain.

Tranz Rail was 5c lower at 380 compared with a 2001 high of 428 in March and a low of 350 in June.

Natural Gas Corp was a cent higher at 89, Casino company Sky City was unchanged at 1085, WestpacTrust rose 5c to 16410, Air NZ's domestic A shares were a couple of cents weaker at 109 and so were the freely held B shares at 144.

Fisher and Paykel gained 5c to 1180, Brierley Investments rose a cent to 65, Fletcher Building was 3c higher at 236 and Fletcher Forests was steady at 29, on turnover of 2.13 million shares.

Meat exporter Richmond was unchanged at 250 and Auckland International Airport lost 3c to 379.

Pay TV operator Sky TV was 5c lower at 340, part owner, Independent Newspapers rose a cent to 375 and wood-products firm, Carter Holt Harvey was a cent higher at 172.

The Warehouse gained 5c to 550, Waste Management was 3c lower at 370, drinks company Frucor was a cent lighter at 161, financial-services company Tower was a cent firmer at 516, AMP rose 10c to 2670 and Baycorp was unchanged at 1270.

Stocks rose sharply on Wall Street on Thursday after a rally - kindled by the Federal Reserve's latest interest-rate cut - received an added spark when a court overturned a ruling that would have split computer giant, Microsoft.

The tech-rich Nasdaq composite index rose 50.72 points - or 2.44 per cent - to 2125.46, the blue-chip Dow Jones average index of 30 industrials gained 131.37 points - or 1.26 per cent - to 10,566.21 and the broader, Standard and Poor's 500 composite index picked up 15.13 points - or 1.25 per cent - to 1226.23.

- NZPA