NZ stocks: US optimism fails to fire up market

The New Zealand sharemarket failed to take note of an infusion of optimism from Wall Street which was buoyed by robust US retail sales.

The NZSE-40 capital index had a firm tone in the morning but closed nearly flat, up just 2.14 points at 1957.41 on a moderate $50.3 million turnover. The benchmark index is only a few points above a 12-month low.

UBS Warburg's Richard Leggat said New Zealand could underperform other markets if there is a better global outlook.

"If people suddenly get more optimistic and bullish about equities, New Zealand as a relatively low beta market is not going to attract that much attention."

Market leader Telecom, which has had a rugged 10 days, rose 4c in the morning but ended 6c down on yesterday's close at 477. Rival TelstraClear signalled it was going to play hardball, asking the Telecoms Commissioner for a final determination on interconnection.

UBS Warburg's Richard Leggat said the Foxtel deal in Australia could put more pressure on Telecom's AAPT as rival Telstra will be able to bundle its pay TV, mobile, and phone offering together.

The market responded to AMP's news it was cutting costs including getting out of banking with a 35c rise in the morning but that was whittled down to 5c to 1370 by the close.

Another company which has had a rough run, credit services firm Baycorp Advantage, rebounded another 7c to 211 to go with yesterday's 10 per cent gain after the company made soothing noises yesterday about the outlook and appointed a new chairman.

Baycorp Advantage, created through the merger of New Zealand's Baycorp Holdings and Australia's Data Advantage a year ago, shed 50 per cent of its value on Tuesday after the company warned it expected to show little earnings growth in the year to June.

There was over $3 million of Baycorp stock traded.

This month's star, Port of Tauranga, rose 10c to 440, continuing its stellar run since its share split. Major shareholder Infratil yesterday revealed it was continuing to sell down its holding now at just over 13 per cent but that failed to stop it touching a record 450.

Unlike Telecom, Fletcher Building recovered morning losses, to finish square on 325.

Carpet maker Cavalier Corp maintained great form this week, rising 6c to 715 following a 64c surge yesterday following an announcement yesterday that it was forecasting a $9 million half year net profit and was aiming for inclusion in the top 40 index.

The company also revealed plans for a two-for-one share split early next month.

The Fisher & Paykel twins were weak in the face of the strong New Zealand dollar. Appliances fell 14c to 1061 while Healthcare dropped 5c to 1075.

Tranz Rail dropped 4c to 125. Mr Leggat said he expected Tranz Rail to remain mired until the rights issue was out of the way.

Embattled Tower closed unchanged on 170 after announcing it had failed to sell its Tower Trust business in Australia and New Zealand.

Auckland Airport responded to its hike of the airport departure tax with a 6c gain to 534.

Infratil rose 3c to 179 following its half year result yesterday and despite it canning its half year dividend for tax reasons.

Rises outnumbered falls considerably by 55 to 26 on 126 stocks traded.

US stocks rallied on Thursday after retail sales outside the auto sector posted their biggest gain in six months, spurring hopes that US consumers will continue spending and keep driving an economic recovery.

The blue-chip Dow Jones industrial average rose 143.64 points, or 1.71 per cent, to 8,542.13, based on the latest data. The broader Standard & Poor's 500 climbed 21.74 points, or 2.46 per cent, to 904.27, while the technology-laced Nasdaq Composite Index jumped 50.18 points, or 3.69 per cent, to 1,411.52. The S&P 500 has climbed 16 per cent since sinking to a five-year low on October 9.

- NZPA