Modest early gains for NZ sharemarket

NZPA

Friday 8th July 2011

The New Zealand sharemarket was made modest gains in early trading, after world stocks had hit five-week highs.

Stock exchange operator NZX was down 9c to 241 early, after The Dominion Post reported an employment dispute could be costly for the company. NZX said statements reported in the article were exaggerated and inaccurate.

Key stock Telecom fell 3c to 249, but other market leaders moved up with Fletcher Building adding 3c early to 838 and Contact Energy up 4c to 536.

Mainfreight shares were up 10c to a new high 1055, while OceanaGold lifted 4c to 349, Sky City was up 3c to 362, and Nuplex was up 3c to 290. Fisher & Paykel Healthcare was down 2c to 269 and Trustpower lost 2c to 723.

Around 10.20am the benchmark NZX-50 index was up 4.02 points to 3464.57, having edged down 0.3 points yesterday.

In the United States, stocks closed sharply higher as improved labour market and retail sales data added to optimism a day before the critical June payrolls report.

Data from payrolls processor ADP showed US private-sector employers added 157,000 jobs last month, more than double what was expected. The report, coupled with a fall in new claims for jobless benefits, raised hopes that a recent slowdown in the economy may only be temporary.

Retailers were among the best performers after several top companies reported better-than-expected sales gains for June, using bargains to lure shoppers in an uncertain economy.

The Dow Jones industrial average shot up 0.7 percent to 12,719.49, the Standard & Poor's 500 Index gained 1.1 percent to 1353.22, and the Nasdaq Composite Index climbed 1.4 percent to 2872.66.

Global and European stocks hit their highest levels since June 1. The MSCI world equity index rose 0.8 percent. The pan-European FTSEurofirst 300 index closed up 0.4 percent.

"We went through a multi-month period of disappointing data, and now it is coming in better than anticipated, and that reset of expectations is providing a nice tailwind to markets," said Gary Flam, portfolio manager at Bel Air Investment Advisors in Los Angeles.

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