NZ stocks: Telecom and Wall St underpin morning trade

12.00pm

A firm Wall St after the US Federal Reserve left interest rates unchanged and local market heavyweight Telecom helped underpin the sharemarket here in early business today.

At 11.30am, the benchmark NZSX-50 index was up 8.77 points at 2306.85, while the NZSX-40 capital index was up 8.25 points at 2198.14.

Telecom was up 2c to 494 on business worth over $5 million.

Total market turnover was worth over $20 million with nearly $5 million of that in ANZ Bank, which this week announced it was buying National Bank for an effective $6.25 billion. It was trading around $21 on the local market.

In the United States, stocks rose in heavy trading after the Federal Reserve voted to keep interest rates steady at 45-year lows, as expected.

The Fed said low inflation remained its chief concern, suggesting it will keep rates down for the foreseeable future in an attempt to speed the economy's recovery, which should in turn help corporations boost profits.

The US market was also buoyed by merger and takeover activity. R J Reynolds Tobacco Holdings said it would buy British American Tobacco Plc's US cigarette business for more than US$3 ($4.96) billion.

The return of the mega-merger was kicked off early on Monday with Bank of America Corp's agreement to buy FleetBoston Financial Corp for US$43 billion.

The Dow ended up 137 points, or 1.43 per cent, at 9745.2 while the Nasdaq added 48.59 points, 2.58 per cent, at 1931.5.

Fisher & Paykel Healthcare recovered a third of yesterday's 29c towelling. It was up 9c to 1180 today. The company, which has more than half its sales in the US, has been under pressure because of the weak US dollar and strong New Zealand unit.

Healthcare may have slumped with rival Resmed yesterday after brokers downgraded the stock. But today it reported buoyant sales and a good outlook for its anti-snoring devices.

Sister company Fisher & Paykel Appliances was up 6c to 1466.

Auckland International Airport was up 5c at 650 after it said today it was expecting its busiest ever period over the coming summer.

Chief executive Don Huse said yesterday marked the beginning of the Northern Winter Schedule and the company expected an estimated 30 per cent increase in international passenger seat capacity over the same time last year.

Port companies were mostly down after Ports of Auckland reported a drop in container traffic yesterday. It fell 4c to 821, Northport was down 2c to 310, and Lyttelton Port was down 4c to 163. However, Port of Tauranga was up 5c at 430.

Utilico was up 14c to 250 on small turnover.

Others to move included; TrustPower, up 15c to 560, Sky City, up 3c to 891, Scott Technology, up 5c to 335, Fletcher Building, up 2c to 438, and Carter Holt Harvey, up 2c to 184.

There were 43 stocks in the positive and 27 down among the 120 traded.

- NZPA