NZ stocks: Shares follow upward trend on mild volumes

12.00pm

The New Zealand sharemarket followed global trends upwards this morning, although volumes were mild.

Just after 11am, the NZSE-40 capital index was up 8.05 points or 0.41 per cent to 1991.25 on turnover worth $23.8 million.

The upturn mirrored Wall St, where US markets were reacting positively to a major switch from bonds to equities overseas.

"It started in Europe, it's asset allocation switch from one of the big pension funds out of the US, so that's given all the world markets a bit of a boost and potentially some of that might be coming in here," said Joe Gallagher, an institutional adviser with JB Were.

But this morning there was little sign of the hefty volumes earlier this week.

Volatile Telecom dominated, rebounding 6c to 471 on $10.6 million worth of shares as it followed overseas markets.

Credit ratings agency Standard and Poor's said today that Australasian telcos were relatively insulated from the sector's worldwide malaise, and gave them a steady outlook.

Forestry giant Carter Holt was up 3c at 186 on $4.2 million worth of shares. The stock has risen 5 per cent in a week as northern hemisphere fund managers adjusted their portfolios.

Also benefiting from the interest was Contact Energy, which edged up 2c to 404 after an 8c jump yesterday.

Trading interest in meat company Richmond continued to tail off after news that Graeme Lowe's Lowe Corp appeared to have acquired enough stock to block the PPCS bid at $3.05/share.

The shares fell another 10c to $2.65 this morning on general sentiment that the current PPCS offer would fail unless it was revised upwards.

Another takeover target, Goodman Fielder, was steady at 183 as investors weighed the future of Burns Philp's bid following Goodman's revelations yesterday about tax losses and debt covenants. Analysts are worried Burns Philp may lower its bid or even pull it.

Goodman's price has fallen 6c since Monday.

Investment company BIL was also steady at 52 after Channel Islands company Orb confirmed it was not going to follow through on prior interest in BIL's stake in British hotel chain Thistle at this stage.

Other moves included Auckland Airport, down 3c to 537; Baycorp Advantage, up 3c to 230; Independent News and Sky TV up 2c at 322 and 357 respectively; Michael Hill up 10c to 635; Sky City down 5c to 805; and Tower up 1c to 226.

So far there have been 24 rises and 20 falls on 83 stocks traded.

On US markets, the Dow Jones industrial average closed up 180.87 points, or 2.1 per cent, at 8776.18.

The broader Standard & Poor's 500 Index was up 17.64 points, or 1.94 per cent, at 927.57. The technology-laced Nasdaq Composite Index was up 37.39 points, or 2.67 per cent, at 1438.46.

- NZPA