NZ stocks: Shares up despite disastrous confidence survey

12.30 pm

The New Zealand sharemarket was trading in positive territory this morning following a rally on Wall Street, despite the release of a survey showing local business confidence took a king hit after the September 11 terrorist attacks.

The benchmark NZSE-40 index was up 5.87 points, or 0.31 per cent, at 1873.65 by just after 11am.

Turnover totalled $22 million.

Business confidence posted its largest seasonally-adjusted fall since June 1984 following the attacks, according to the Institute of Economic Research's (NZIER) Quarterly Survey of Business Opinion for September.

A net 44 per cent of businesses now expect the general business situation to worsen over the next six months, compared with a net 1 per cent of firms optimistic about their outlook in the June quarter.

ABN Amro institutional dealer Nigel Scott said the result was likely to have a significant impact on the market, as the first real indication of how the local economy was holding up in the face of global events.

Mr Scott said the survey figures were a lot lower than had previously been anticipated.

"That is what people will be concentrating on right now. Those are the sorts of things that impact significantly across retail-land, jobs, consumer spending and that sort of area.

"That is a significant drop. It just shows you how quantum our people are thinking about (the events in the US) at this point in time."

Stocks to gain ground this morning Fisher & Paykel, up 20c at 1370, The Warehouse, up 15c at 607, Carter Holt Harvey, up a cent at 147, Contact, up 2c at 344, Air New Zealand's unrestricted B shares, up 1c at 30c and Telecom, up 2c at 438.

On the downside, Auckland Airport was down 5c at 328, Telstra was down 1c at 624 and Restaurant Brands shed 2c to 156.

Rises outnumbered falls by 27 to 16 among the 93 stocks traded.

With little news due out today, Mr Scott said the market would likely spend the day digesting the confidence figures.

In the United States stocks rallied on Wednesday after the latest stream of earnings news provided few disappointments and Wall Street continued to take US military action in Afghanistan in stride.

The broad Standard & Poor's 500 Index rose 24.24 points, or 2.29 per cent, to 1,080.99, about 1 per cent below its Sept. 10 closing level. The technology-packed Nasdaq Composite Index closed up 56.07 points, or 3.57 per cent, at 1,626.26. The Dow Jones industrial average gained 188.42 points, or 2.08 per cent, to 9,240.86.

- NZPA