NZ stocks: Telecom boosts NZ key index to fresh 11-month highs

12.00pm

A solid performance from market leader Telecom has helped boost the New Zealand sharemarket's key index to new 11-month highs.

By late morning the NZ50 gross index was up 10.23 points, or 0.50 per cent, at 2068.89, on turnover of 16.19 million stocks valued at $32.43 million.

Topping turnover was freight company Owens, which said today that fellow listed company Mainfreight had taken a 10.08 holding.

The 5.72 million Owens shares in the transaction were valued at $5.49 million.

ABN Amro Craigs retail equities advisor Nigel Scott said continued yield-chasing from investors had helped boost some of the blue chip stocks today.

"Same theme as before, people continue to chase yield, some of the heavyweights -- not big volumes here but the market still seems to be supported from that side," Mr Scott said.

Among the top stocks, Telecom was up 6c at 514, Carter Holt Harvey was up 2c at 162, Independent Newspapers Ltd gained 3c to 435, Sky TV was up 1c at 442, casino company Sky City was up 1c at 839, and The Warehouse rose 1c to 452.

Financial services company Tower was down 3c at 143 on news of its first half result and details of its capital raising today.

Tower posted a first half net loss of $154 million and said it would raise $200 million through the placement of 50 million shares with shareholder Guinness Peat Group at $1.35 per share, and a pro-rata renounceable rights issue of $135 million with an exercise price of $1.00.

GPG shares were down 2c at 143.

Owens shares were up 6c today at 93 on news of Mainfreight's increased stake, while Mainfreight was up 3c at 139.

"Obviously they're trying to think about the prospect of (Australia's) Toll Holdings, if they get a good holding in New Zealand, what that will mean for the opposition," Mr Scott said.

"If Toll gets Tranz Rail and (road transport division) TranzLink, that creates a pretty solid opposition block to Mainfreight and possibly Owens," he said.

Tranz Rail, which was told on Friday that surprise suitor RailAmerica was no longer interested, was up 2c at 88 today.

"There's firmness in Tranz Rail price -- a bit of speculation about what's going to go on in Tranz Rail shortly.

"So the broad market is still very strong," he said.

Elsewhere on the market, Fletcher Building was down 1c at 353, Auckland International Airport lost 1c to 555, and Fisher & Paykel Appliances was down 5c at 1115, losing some of yesterday's gains ahead of tomorrow's result.

Vertex rose 2c to 162, Trustpower was up 10c at 445, and Turners Auctions gained 5c to 315 following news yesterday of its Canadian joint venture.

There were 49 rises and 17 falls on the 105 stocks traded.

Wall St saw some big rises, with the Nasdaq Composite Index up more than 3 per cent at 1556.69, the Dow Jones industrial average climbing 179.97 points, or 2.09 per cent, to 8781.35, and the Standard & Poor's 500 Index up 18.26 points, or 1.96 per cent, at 951.48.

- NZPA