Wednesday 20th April 2011
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The New Zealand sharemarket posted solid gains today helped by a resurgent Telecom and some positive statements about earnings from companies.
The benchmark NZX-50 index closed up 32.819 points, or 0.954%, at 3472.803. Turnover was worth $127.83 million. There were 46 rises and 29 falls among the 112 stocks traded.
The market had ended down 25.2 points yesterday after a threat by Standard & Poor's to cut its AAA rating of US government debt and renewed worries about Europe's debt crisis spurred a sell-off in major world stock markets.
Telecom (NZX: TEL ) rose 10c, or 4.87%, to $2.15.5, a six-week high, after saying the company's joint venture with Vodafone has been chosen for the Government's $285 million Rural Broadband Initiative. Volume was large but brokers said some of reflected transactions yesterday.
"The momentum is the interesting thing. I guess the market is taking an inference from this that they are more likely to be involved in ultrafast broadband," James Lee, head of institutional equities at First NZ Capital said.
Most of the leading shares were having a better day, he said.
Sanford (NZX: SAN ) was unchanged at $5.65, even though the fishing company today signalling a higher interim profit, and DNZ Property (NZX: DNZ ) rose 3c to $1.29 after releasing a better than forecast distributable profit.
SkyCity (NZX: SKC ) rose 3c to $.342 on the day the Securities Commission warned against an unsolicited offer from a limited partnership associated with Bernard Whimp at $2.30 a share.
Ebos (NZX: EBO ) eased 7c to $7.43.
In the US, encouraging results from health care and materials companies lifted stocks, but weak earnings from Goldman Sachs limited gains in a market sceptical of the growth outlook.
Investors were reluctant to make big bets as the market readied for a spate of high-profile earnings. Volume was extremely low, with 6.65 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, well below last year's daily average of 8.47 billion.
Goldman Sachs posted a steep profit drop as trading revenue fell, the latest in a number of underwhelming reports from banks. The investment bank warned there were fewer opportunities to make money in the current environment.
The Dow Jones industrial average gained 0.5% to 12,266.75 at the close, the Standard & Poor's 500 Index added 0.6% to 1312.62, and the Nasdaq Composite Index advanced 0.4% to 2744.97.
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