NZ stocks: Shares follow Wall St rally

New Zealand shares shrugged off yesterday's post-Anzac day malaise to close up strongly today.

The NZ50 gross index ended 19.42 points, or one per cent, higher at 1993.04 - almost squaring up yesterday's losses - while the NZSE-40 capital index was 19.58 points stronger at 1960.30.

Forsyth Barr Frater Williams equities broker Alan Wills said the bourse took its lead from Wall Street, where the Dow Jones index notched up its biggest gain in a month overnight following solid results from blue chips McDonald's Corp and Procter & Gamble Co.

The Dow closed up 1.99 per cent at 8471.61 - its biggest rally since April 2. The broader Standard & Poor's 500 Index rose 1.78 per cent to 914.84 and the technology-laced Nasdaq gained 1.93 per cent to 1462.24.

"It wasn't a bad day today, starting off with a nice backdrop from overseas," Mr Wills said.

Telecom led the local charge, surging 15c, or 3.3 per cent, to 470 as investors home in on the telco's sturdy balance sheet and prospects for increased dividends as it moves away from its "growth stock" philosophy.

"People are looking at the possibility of higher dividends in the next year or so," Mr Wills said.

Elsewhere, stocks were strong across the board, with rises outnumbering falls by 54 to 42 among the 134 stocks traded.

Tourism stocks rallied after the World Health Organisation said yesterday that the deadly Sars virus, responsible for over 300 deaths worldwide, had peaked outside of China.

Auckland International Airport, the gateway for most of New Zealand's tourists, added 11c to 503; national carrier Air New Zealand was 2c higher at 39c; and tour operator Tourism Holdings Ltd rose 6c to 92c.

Air NZ said today it will raise its international airfares by about 3 per cent from early next month as part of an "an industry-wide decision" to counter the impact of Sars on ticket sales.

In other moves: Sky City fell 3c to 825; Contact Energy dived 14c to 437 - despite the looming power shortages; Briscoe Group edged 2c lower to 192; Carter Holt Harvey was off a cent to 163 ahead of its annual meeting in Auckland tomorrow; The Warehouse gained 9c to 565; Fletcher Building rose 2c to 335; and sister stocks Fisher and Paykel Healthcare and Appliances each shed 5c to 1060.

TrustPower gained 5c to 430 after Australia's biggest energy retailer, the Australian Gas Light Co (AGL), yesterday announced it would quit its stake in the company by selling its shares into a buy-back offer for $A135 million ($NZ151.90 million).

TrustPower announced plans for a two-for-seven buy-back at $NZ3.70 a share last month and AGL said it had agreed to accept for the whole of its 20.5 per cent shareholding.

Brokers said the move clears the way for AGL to focus on its key New Zealand asset, 66-per cent owned NGC Holdings Ltd, and a possible capital return by that stock.

NGC closed up 3c at 154.

Tranz Rail shed a further 4c to 41c as investors await news of the trouble rail operator's fate. Chances of a Government bailout are slim after Finance Minister Michael Cullen yesterday said the Crown would not rescue Tranz Rail, which has been downgraded to junk status by ratings agencies.

- NZPA