NZ stocks: Telecom rally lifts market

6.30pm

New Zealand shares enjoyed a late afternoon rally as market heavyweight Telecom shrugged off yesterday's selloff.

The NZSE-50c gross index rose 15.27 points, up 0.81 per cent, to1901.39 on turnover of $57.6 million, defying a slump on Wall St.

The old NZSE-40 capital index jumped 13.03 points to 1892.23. Brokers said the day's performance was order driven and not stock specific, with pockets of activity here and there.

The major influence was Telecom, which dominates the Top 50 with a 27 per cent weighting. It mounted a relief rally of 12c to 425 after going ex-dividend yesterday and slipping to a near 10 year low.

James Snell of First NZ Capital said Telecom had been sold back possibly more than it should have been, and the stock had found favour with yield players today.

"There was a bit of buying in the Australian dollar overnight, and we saw the 10-year bonds in Australia go back down through 5 per cent. So just with that there was a little bit of buying in some of the yield stocks."

Restaurant Brands - which has fallen 18 per cent over the last month on concerns about increased domestic competition - closed up a cent to 130 after quarterly sales figures.

One broker said feelings about the fast food operator were mixed, with lower sales in the KFC chain already factored into the share price.

The company, which operates KFC, Pizza Hut and Starbucks, reported an 8.6 per cent increase in fourth quarter sales to $68.6 million compared with the same period a year before.

It was a better day for energy company NGC Holdings, which gained 9c to 149. Brokers put the gain down to the conclusion of the sale of its Taranaki Combined Cycle and Cobb power stations. That paves the way for NGC to consider a cash return to shareholders.

Auckland Airport also rose 11c to 543 after shedding 14c yesterday. The stock fell on concerns about global tourism but migration figures and a solid result last week have put it back in investors' good books.

Beleagured retailer the Warehouse, which rose 14c yesterday, fell another 5c to 565, and volatile Baycorp Advantage fell 3c to 112 in the wake of a first half loss announcement last week.

Vertex rose 2c to 148, despite a finding of breaching stock exchange rules for issuing a profit warning soon after listing last year.

The plastic container manufacturer issued a profit warning only 9-1/2 weeks after its $61 million float on July 1.

Other stocks to move included THL, up 2c to 105 on solid turnover, Powerco up 4c to 127, Contact down 3c to 436, Mooring Systems down 10c to 120, Fletcher Building up 2c at 363, and Carter Holt Harvey down 3c to 175.

There were 43 rises and 38 falls among the 133 stocks traded.

On Wall St, trading reflected a surprisingly soft reading on the US manufacturing sector, quashing early optimism over the arrest of a key al Qaeda member and Iraq's decision to destroy some of its banned missiles.

The blue-chip Dow Jones industrial average ended down 53.22 points, or 0.67 per cent, at 7,837.86. The broad Standard & Poor's 500 lost 6.34 points, or 0.75 per cent, at 834.81 The technology-laced Nasdaq Composite dropped 17.23 points, or 1.29 per cent, to 1,320.29.

- NZPA