Modest early gain for NZ sharemarkert

Monday 7th February 2011

The New Zealand sharemarket started the week with a modest early gain, after stocks in the US had their best week in about two months.

Around 10.15am the benchmark NZX-50 index was up 2.15 points to 3369.97, after gaining 17.9 points on Friday.

Telecom (NZX: TEL ) was unchanged on $2.24 about 15 minutes into trading, having started the day with a 1c gain following an announcement its joint bid with Vodafone for the Government's Rural Broadband Initiative had been selected for commercial negotiations.

Among other major shares Fletcher Building (NZX: FBU ) was up 2c to $8.06 and Contact Energy NZX: CEN ) added 3c to $6.21.

Freightways (NZX: FRE ) gained 4c to $3.24, Ebos Group (NZX: EBO ) was up 2c to $7.52, and Tourism Holdings (NZX: THL ) added 2c to 61, having lost 15c on Friday after the company signalled a breach of banking covenants in the March quarter, and cut its full-year forecast to a $4 million loss from a $2.5 million net profit previously forecast.

NZ Wool Services International (NZX: WSI ) gained 3c to 50 and Burger Fuel (NZX: BFW ) was up 5c to 40. Fisher & Paykel Healthcare (NZX: FPH ) lost 2c to $3.18 and Mainfreight (NZX: MFT ) was down 2c to $8.35.

In the US, signs of improvement in the economy and strong corporate earnings have propelled stock prices, but tapering volume, meagre gains and declining numbers of advancing stocks pointed to waning buying interest at the end of the week.

On Friday (local time), the Dow Jones industrial average rose 0.3% at 12,092.15, the Standard & Poor's 500 Index added 0.3% at 1310.87, and the Nasdaq Composite Index climbed 0.6% at 2769.30.

For the week the Dow rose 2.3 percent the S&P 500 rose 2.7% and the Nasdaq gained 3.1%.

NZPA

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