NZ stocks: Shares move higher as buyer interest grows

The sharemarket posted a second day of modest gains today as investors showed further buying interest in some recently sold down stocks.

The NZSX-50 gross index closed 12.47 points or 0.51 per cent higher at 2463.14, while the NZSX-40 capital index closed 12.15 points or 0.54 per cent higher at 2254.00.

Turnover was worth $58.91 million, with 62 rises and 37 falls among 150 stocks traded.

Macquarie Equities investment director Arthur Lim said the local market was now starting to dance to Wall St's generally upbeat recent tune.

"Just within the last couple of days or so we've started to find some traction."

Some companies had posted very good earnings over the recent reporting season, but there had also been some fairly persistent offshore selling of New Zealand stocks, as overseas investors locked in profits boosted by the local market's robust progress in the last year and the local currency's concurrent appreciation.

Mr Lim said the sell off had continued to a level where some stocks were presenting fairly good value.

Although market leader Telecom dipped 3c to 438, the market was kicked along by second tier stocks including Carter Holt Harvey which rose 11c to 205.

The wood processor rose today on increasing expectations expectations of a successful sale of its tissue business.

Contact Energy, rumoured to be stalked by Australian Gas Light (AGL), rose 2c to 512 after yesterday's 10c rise. California's Edison Mission is said to be looking at selling its 51 per cent holding in Contact to reduce debt on the home front.

Meanwhile, NGC Holdings, two thirds owned by AGL, fell another 2c to 235 after losing 6c yesterday on related talk that AGL would flog off its holding to make way for a $3 billion bid for Contact.

Air New Zealand was up 2c to 40c. Mr Lim didn't believe this was sparked by the airline's announcement of cuts of up to 64 per cent in fares to the Pacific region and a prediction of a consequent double digit growth in that market.

"In fact the news coming out today would be perceived as a negative," he said.

Mr Lim said its rise today was likely investors taking advantage of what at 38c was a reasonably cheap price.

Other stocks to bounce after recent moves lower included Sky City and the Warehouse.

Sky City was up 9c to 439 today after being sold down in previous sessions on concerns about its acquisition of the MGM Grand Casino in Darwin and the lack of performance from the Adelaide Casino it bought in 2000.

The Warehouse was up a cent at 434, 2c higher than it was trading just before its shares were placed in a trading halt on Thursday last week in advance of its disappointing result released the following day.

Mr Lim said the company's shares were possibly undervalued at current levels.

"The market is putting a fairly big negative value on the Australian operations which we feel is really unwarranted."

Elsewhere, investment company Guinness Peat Group which today reported a 45 per cent jump in its 2003 net profit, was a cent lower at 194.

News & Media exchangeables were up 2c to 440 after APN reported a strong profit result yesterday.

Other stocks to move included: Auckland International Airport up 5c to 657, BayCorp Advantage up 4c to 320, Cavalier Corp up 4c to 510, Fletcher Building up 3c to 415, Fisher & Paykel Healthcare down 5c to 1160, Infratil down 3c to 267, Independent Newspapers Ltd down 5c to 475, NZX up 21c to 721, Pacific Retail Group up 7c to 207, Ports of Auckland up 10c to 710, Ryman Healthcare up 7c to 217, Sky TV up 3c to 513, and Waste Management down 5c to 414.

Meanwhile in the US yesterday stocks fell, eroding solid gains made in the previous session as investors awaited key jobs data due on Friday for more clues to the strength of the US economic rebound.

The blue-chip Dow Jones industrial average dropped 86.66 points, or 0.81 per cent, to end at 10,591.48. The technology-focused Nasdaq Composite Index lost 18.14 points, or 0.88 per cent, to end at 2,039.66, based on the latest available data. The Standard & Poor's 500 Index slipped 6.87 points, or 0.59 per cent, to close at 1,149.10.

- NZPA