NZ stocks: Top 4 stocks lead NZ share index to fresh peak

5.56pm

The four biggest stocks led the benchmark share index to a fresh peak today, offsetting a woeful day for The Warehouse and mixed fortunes elsewhere.

The Warehouse slumped 19c to 385 after the retail discounter reported its Red Sheds' same-store sales fell 2.6 per cent in the October quarter.

Forsyth Barr Frater Williams broker Richard Burton said The Warehouse was the day's feature, but a lowlight rather than a highlight.

He said that given retail sales had expanded both in New Zealand and Australia, The Warehouse must be losing market share.

"People are starting to think that maybe discounting is not the way to go."

He said new chief executive Ian Morrice was still an unknown quantity and a turnaround in Australia looked a long, slow process.

Fellow discount retailer Briscoe, which yesterday announced a 2.67 per cent fall in same-store third quarter sales, fell almost as hard -- down 6c to 131.

There was good demand for the leaders, particularly in the afternoon. Market leader Telecom gained 1c to 590. Macquarie broker David Cleal said that with its result out of the way and on track, investors were concentrating on its attractive yield.

Fletcher Building rose 12c to 578 after it said it expected full-year operating earnings of up to $500 million despite forecasts of a slowdown in residential building activity.

Chairman Roderick Deane told the building products company's annual shareholders meeting in Auckland that while residential building activity was expected to slow in the June 2005 half, strong non-residential and infrastructure demand would likely continue.

Mr Burton noted that Fletcher Building tended to over-deliver on its promises.

Other stocks in the building sector performed strongly. Carter Holt Harvey recovered a bit of form, to rise 4c to 211 and Tenon gained 5c to 228.

Also in the top group, Contact Energy rose a healthy 8c to a new high of 627. Fellow power company Trustpower rose 5c to 520. State power company Genesis gave encouragement to the sector by lifting power prices again.

The NZSX-50 gross index reversed morning losses to finished up 8.72 points at 2889.29, although off its session and historic high of 2893.16. The NZSX-All capital index closed up 3.10 at 955.99.

Financial services company Tower continued its momentum, rising 5c to 241 and Promina, seen as a possible Tower suitor, gained 4c to 520. Elsewhere in that sector, AMP fell 3c to 743 and Axa dropped 8c to 424.

Auckland Airport fell back 10c to 745 following its good recent run.

Pumpkin Patch showed not all was gloomy in the retail sector with a 6c gain to 226, while Hallenstein Glasson rose 2c to 374.

Australian banks, seen as struggling to maintain the strong profits they have reported this week, fell back. ANZ lost 15c to 2255 and Westpac fell 10 to 1980.

Fisher & Paykel Healthcare gained 3c to 312 as investors geared up for its half-year result tomorrow. Brokers said the stock had had a good run up lately and would need a good result just to hold its current price.

Fisher & Paykel Appliances, due to report on Thursday, fell 2c to 417.

Air NZ rights began trading today, closing at 26c against the head share price of 152, down 2c.

Market turnover figures suggested an overseas portfolio buyer. There was $33m traded in Telecom, $13m in Fletcher Building and $9m in Contact, for overall market turnover of $101.6m.

The top 10 index rose 4.69 points to 1131.76 while the small stocks index rose 3.72 to 8049.71.

Of the 157 stocks traded, 58 closed higher and 47 lower.

- NZPA