MARKET CLOSE: Sharemarket rises to highest level in 28 months

Thursday 13th January 2011

The NZX-50 index rose to its highest level in 28 months today after a successful bond auction in Portugal saw European and United States markets post solid gains.

The rally was most evident in leading shares but brokers also noted strength in retailers even though a 0.9% fall in spending on electronic cards in December suggested times are still tough for them.

The benchmark NZX-50 index closed up 39.12 points, or 1.173%, at 3373.705. Turnover was worth $89.87 million, which was seen as good for the time of the year. There were 52 rises and 18 falls among the 100 stocks traded.

"Sentiment has transferred across to today's market," said Stuart Hardie, an adviser at ABN Amro Craigs. "Our leaders have been backed pretty well today," he said.

Michael Hill (NZX: MHI ) rose 3c to 91 after the jewellery chain facing a partial takeover bid by the Hill family lifted its earnings outlook after posting stronger first-half sales.

"The trading update does say a lot when the bigger data is pointing to the sector not being too good," Hardie said.

He said it was surprising that retail stocks rose today when the transaction data was so weak.

The Warehouse (NZX: WHS ) rose 3c to $3.54, Pumpkin Patch (NZX: PPL ) rose a cent to $1.78 and Kathmandu (NZX: KMD ) was unchanged at $1.76. Hallenstein Glasson (NZX: HLG ) fell 3c to $4.15.

Telecom (NZX: TEL ) rose 8c to $2.29 and brokers said the volume traded in the stock was good for the time of the year. Fletcher Building (NZX: FBU ) rose 9c to $7.96 and Contact Energy (NZX: CEN ) rose 11c to $6.35.

Nuplex (NZX: NPX ) rose 2c to $3.52 after saying none of its Queensland sites had been flooded.

Tower (NZX: TWR ) was unchanged at $2.00 and AMP (NZX: AMP ) eased 1c to $6.65.

SkyCity (NZX: SKC ) fell 3c to $3.33, Steel & Tube (NZX: STU ) rose 2c to $2.29 and Fisher & Paykel Healthcare (NZX: FPH ) rose 4c to $3.15. Auckland Airport (NZX: AIA ) rose 2c to $2.26.

In the US, stocks ended solidly higher, driven by gains in banks and commodity-related shares, with further flows into equities on speculation the economy will strengthen.

The Dow Jones industrial average was up 0.72% at 11,755.36, the Standard & Poor's 500 Index was up 0.9% at 1285.95, and the Nasdaq Composite Index was up 0.75% at 2737.33.

Other good news overnight included data showing the fastest pace of economic growth in Germany since unification in 1991 - 3.6% in 2010 after a contraction of 4.7% in 2009.

NZPA

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