NZ stocks: Shares rally on greater war certainty

The New Zealand sharemarket followed global trends by rallying today in response to the news that the United States had issued an ultimatum to Iraq.

Signs of much-needed certainty for the markets saw the NZ50 gross index rise 1.23 per cent or 23.237 points to 1912.02. The former benchmark NZSE-40 capital index also firmed 1.31 per cent or 24.537 points to 1895.45.

After more than a week of light volume, investors climbed back in with a total turnover of $101 million.

"Really it was just solid support right across the index, and Telecom, which is the big contributor to the NZSE40 or 50, was up 2 per cent so clearly a buoyant day and we'll wait and see what happens overnight," JB Were equities adviser Mark Gander said.

Investors overseas were even more enthusiastic as they bet on a short, sharp war in Iraq.

The London FTSE 100 rallied 3.4 per cent, taking that battered market's rally over the past three days to more than 12 per cent. Wall Street followed on with a 3.6 per cent rally and the Nasdaq composite index jumped 3.9 per cent.

Forsyth Barr Frater Williams executive director Don Turkington said one reason the New Zealand market would not rally strongly was that it lacked a deep derivatives market.

Another was that there was no "weight of money" driving things as there was in the United States.

Corporate news was thin on the ground but trading was strong across the board.

Telecom accounted for more than half the turnover, up 8c to 426 on $53.3 million worth of shares.

Another standout performer was AMP, which is heavily exposed to the FTSE and benefited from the jump in British stocks. It rose 52c to 812.

Debt recovery agency Baycorp Advantage shook off the negative sentiment of recent months, rising 8c to 138, while Air New Zealand edged up 3c to 52c following a strong surge in airline stocks worldwide as investors took a punt on any war being brief.

Other gainers included DB up 19c to 610; Independent News Ltd up 6c to 320; Steel & Tube up 7c to 315; Tranz Rail up 2c to 109; Sky TV was up 7c to 353; and Contact up 5c to 457 on fresh concerns about a dry winter.

Number two stock Carter Holt Harvey was up 3c to 174 on light turnover, the Warehouse rose 4c to 570, and Australian banks Westpac NZ and ANZ jumped 19c to 1455, and 45c to 1840 respectively.

Guinness Peat Group gained 3c to 174 after winning a court case over Rubicon shares last Friday; and Ports of Auckland rose 10c to 650 after announcing a 12 per cent rise in freight volumes for February, compared to the previous year.

Among the few in the red were Fletcher Building, down a cent to 363 on solid turnover; Sky City Leisure (formerly Force Corp) convertible notes, down 14c to 146; Hallenstein Glasson, down 5c to 265.

In all there were 56 rises and 28 falls among 133 stocks traded.

- NZPA