MARKET CLOSE: Sharemarket rises as leading shares post gains

Wednesday 23rd February 2011

The New Zealand sharemarket rose today while other markets fell as key leading stocks rose in reaction to past profit announcements and the prospect of future earnings from reconstructing earthquake ravaged Christchurch.

Brokers said the rise reflected the impact selected leaders have on market indices.

The NZX-50 index closed up 13.363 points, or 0.398%, at 3372.069. Turnover was worth $113.23 million. There were 24 rises and 48 falls among the 107 stocks traded.

The benchmark index rose even though the United States market was weak on Tuesday and as the Australian market posted losses.

Fletcher Building (NZX: FBU ) closed up 7c at $8.55 and traded as high as $8.63 as investors bet the building firm charged with the reconstruction of Christchurch after the September 4 earthquake would have more work to do after Tuesday's earthquake devastated the centre of the city.

Contact Energy (NZX: CEN ) rose 9c at $6.20 after delivering a result ahead of expectations earlier this week. Telecom (NZX: TEL ) was unchanged at $2.15 and SkyCity (NZX: SKC ) rose 2c to $3.31.

"We are one of the few markets that is up on the day and the key is that the New Zealand does not necessarily replicate the New Zealand economy. Heavyweight stocks performed well," Nigel Scott at Craigs Investment Partners said.

"The market has probably surprised by being up but this market does provide a yield return," he said.

This was attractive to investors, particularly if interest rates may remain lower for longer as a result of the earthquake.

A number of companies made statements to the exchange about the implications of the magnitude 6.3 earthquake.

Forsyth Barr managing director Neil Paviour-Smith said all of the company's Christchurch staff were safe. About 12 staff members were rescued yesterday from the 12th floor of the Christchurch Forsyth Barr building, on Colombo Street. Another 11 staff were at lunch or at meetings when the quake struck.

He said the earthquake would probably have a net negative impact on NZX.

A lot of economic output would be lost, which would feed through to companies that had business exposures in Christchurch.

However, Fletcher Building stood to benefit from the rebuilding effort following the quake.

"There are offsetting factors."

Steel & Tube (NZX: STU ) eased 1c to $2.55, Mainfreight (NZX: MFT ) eased 5c to $8.05 and NZX (NZX: NZX ) eased 1c to $1.65.

NZOG (NZX: NZO ) fell 2c to 85 after reporting an interim loss and Nuplex (NZX: NPX ) fell 4c to $3.59 after announcing that it had reached a settlement of matters raised in civil proceedings brought by the Securities Commission.

Air NZ (NZX: AIR ) fell 1c to $1.34, Skellerup (NZX: SKL ) fell 2c to $1.26 and Scott Technology (NZX: SCT ) fell 1c to $1.25. The Warehouse (NZX: WHS ) fell 1c to $3.45.

Pyne Gould Corp (NZX: PGC ) rose a cent to 32 even as the company focused on helping recover people from its Christchurch building. PGG Wrightson (NZX: PGW ) shares fell 1c to 50.

In the US, stocks fell sharply and oil prices spiked to their highest level in two years as unrest in worsened in Libya.

The Dow Jones industrial average fell 1.4% to close at 12,213, the Standard & Poor's 500 index fell 2% to 1315, and the Nasdaq fell 2.7%, to 2756.

NZPA

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