MARKET CLOSE: Sharemarket turns around weak start to close higher

Thursday 5th May 2011

he New Zealand sharemarket shrugged off a weak open to finish slightly higher, even though stocks in the United States fell for a third day as weak economic figures heightened stock investors' anxiety.

Telecom (NZX: TEL ) ended up 2c to $2.18.5 after the Commerce Commission slashed the cost of terminating calls and texts from one operator on another operator's network.

Brokers said the price movement was not out of the ordinary and investors were also waiting for the company to release a trading update tomorrow.

"A lot of the Commerce Commission statement had been pre-discussed," said David Price at Forsyth Barr. "The only real change is that it is coming in slightly later than we previously thought," he said.

The benchmark NZX-50 index closed up 3.798 points at 3498.985.

Methven (NZX: MVN ) closed down 5c at $1.51 after saying its largest customer in the United Kingdom, Focus (DIY) Ltd, is filing a notice of intention to appoint administrators. Methven is owed NZ$1.5 million.

Contact Energy (NZX: CEN ) rights began trading today and traded at 86c each, with buyers at 95c. Brokers said the stock did well to be higher today when entitlements were no longer attached and the price of the right to buy a share at $5.05 was consistent with the $6.01 closing price.

Sky City (NZX: SKC ) rose 2c to $3.61 and Auckland Airport (NZX: AIA ) rose a cent to $2.23.

Fletcher Building (NZX: FBU ) fell 10c to $9.01 and TrustPower (NZX: TPW ) eased a cent to $7.43. Scott Technology (NZX: SCT ) eased 4c to $1.43 and Kathmandu Holdings (NZX: KMD ) eased 4c to $2.54. Vector (NZX: VCT ) eased a cent to $2.48. Nuplex (NZX: NPX ) eased a cent to $3.19 and Xero (NZX: XRO ) eased a cent to $2.48.

In the US, hardest hit stocks included recent winners in the energy and industrials sectors, in what some said was the outset of extended weakness for stocks.

"I think there is a chance that we put the high in for the year," said Doug Kass, founder and president of Seabreeze Partners Management in Palm Beach, Florida.

Reports showed activity in the vast US services sector slowed and hiring by private companies was weaker than expected in April. The new orders index in the purchasing managers survey hit its lowest since December 2009.

The releases "call into question the bullish notion of a smooth, self-sustaining recovery," Kass said.

The Dow Jones industrial average lost 0.7% to 12,723.58, the Standard & Poor's 500 Index fell 0.7% to 1347.32, and the Nasdaq Composite Index dropped 0.5% to 2828.23.

NZPA

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