NZ stocks: Tower, Telecom recover from tumble

12.00pm

The New Zealand sharemarket took a breather today after posting its biggest one-day fall yesterday since the aftermath of September 11.

After tumbling almost 3 per cent yesterday, the NZSE-40 capital index was up 0.55 per cent, or 10.80 points, at 1986.18 by mid-morning, while the top-10 index was up 0.59 per cent at 894.55.

First New Zealand Securities director Phil Hunter said the market had reconsidered its attitude towards market leader Telecom and financial services company Tower, both of which plummeted yesterday following downgraded profit guidance.

On Monday Telecom, which comprises more than 22 per cent of the index, warned it expected a first quarter profit of only $145 million-$150 million instead of around $165 million-$170 million forecast by analysts.

That was after fund manager Tower warned on Friday it would post an annual loss of at least $30 million, instead of the expected $70 million profit.

Telecom was up 9c at 481, having lost 10 per cent in value yesterday, while Tower was up 20c at 190.

"I think it was probably an overreaction, and there's some retracement today," Mr Hunter said.

Tower said it would release its final figures on December 5.

"Investors don't like uncertainty, they're looking for some stability and will be waiting for further information," Mr Hunter said.

He said the market had had time to digest Telecom's profit guidance, and now appeared generally happy with its numbers.

Retailer Briscoe Group was up 13c at 269 after it announced today that third quarter sales were up 20 per cent at $64.2 million on a year ago, as opposed to the forecast 18 per cent, Mr Hunter said.

Elsewhere on the market, The Warehouse gained 4c to 752, Sky City was down 1c at 764 after announcing details of a share buyback and special dividend yesterday, Contact Energy lost 2c to 382, Fletcher Building gained 1c to 306, and Guinness Peat Group was down 1c at 150.

Publisher Independent Newspapers Ltd was down 10c at 315 despite news its 45 per cent owner News Corp doubled its first quarter net profit to A$295 million ($337.7 million) on a "resurgence in the advertising market".

There were 27 falls and 26 rises on the 87 stocks traded.

Hefty turnover of 19.34 million stocks valued at $73.12 million was topped by Telecom's 10.7 millions stocks worth $51.0 million.

The Dow Jones industrial average, lifted by late-day buying, climbed 106.67 points, or 1.24 per cent, to 8678.27; the Nasdaq composite added 4.66 points, or 0.33 per cent, to 1401.20; and the benchmark Standard & Poor's 500 rose 7.05 points, or 0.78 per cent, to 915.50.

- NZPA