NZ stocks: Telecom makes brief rebound

12.00pm

Telecom popped above the psychological $5 mark this morning on a mildly positive Monday morning sharemarket.

Just after 11am, the NZSE40 Capital Index rose 2.97 points to 2031 on turnover worth $20.3 million. Volumes appeared stronger than in recent weeks, but brokers said most of the turnover was done before the market opened.

Despite posting a $188 million loss on Friday, Telecom remained firm, at one stage touching 502 but easing back to be one cent up at 499. On Friday the stock rose 11c rise after Telecom reported a $850 million writedown on its Australian unit AAPT, but the move was not as large as expected and corporate overheads were lower.

"It's just holding and I think most analysts' view on the result is that it was okay," said broker Alan Wills from Forsyth Barr Frater Williams.

"I think there's still some concerns that they've got AAPT in their balance at $1 billion still ... and there were a couple of parts of their business that were surprisingly soft."

Telecom dominated the turnover by value on $8.9 million worth of shares.

Other moves included Baycorp Advantage, down 5c to 415; Auckland Airport up 2c to 420; The Warehouse up 2c to 730; Carter Holt Harvey steady at 180; Contact Energy down 7c to 388. Brokers said lake levels are not as high and wholesale electricity prices are back to normal after last year's windfall profit.

Fisher and Paykel Healthcare was enjoying a good day after its well received first quarter results on Friday, up 11c to 941. Its sister unit, F&P Appliances up 10c to 935, ahead of its AGM today.

Fletcher Forests fell a cent to 23 after news that the High Court had upheld Rubicon's right to vote at tomorrow's Fletcher Forests shareholders meeting. The meeting will decide on the forest company's prospective purchase of the Central North Island Forest.

Rubicon, which holds a 17.6 per cent stake, favours the controversial deal.

Fletcher Building was up 2c to 286 ahead of its June year result on Wednesday.

Sky TV and its majority shareholder, INL, will both report their annual results on Thursday -- today their share prices were up 7c to 384 and 5c to 345 respectively.

Rises outnumber falls 35 to 19 on 94 stocks traded so far.

In New York, blue chip stocks shrugged off early losses to rack up their fourth day of gains on Friday night, but technology stocks slid as a sales warning from data storage equipment Emulex Corp reminded investors the profit outlook is still cloudy.

The Dow Jones Industrial Average added 33.43 points or 0.38 per cent, at 8745.45. The broader Standard and Poor's 500 index rose 3.18 points or 0.35 per cent to 908.64, and the technology-rich Nasdaq Composite Index fell 10.40 points or 0.79 per cent to 1306.12.

Stocks have gained, in part, on hopes the Federal Reserve will take another whack at interest rates to lift the economy after 11 cuts last year took rates to their current 40-year-lows.

- NZPA