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MARKET CLOSE: NZ sharemarket little changed as earnings awaited

Wednesday 9th February 2011

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The New Zealand sharemarket rose modestly today as investors waited for the corporate reporting season to gear up.

Telecom (NZX: TEL ), which reports half-year earnings on Friday, rose 3c to $2.21, while Freightways (NZX: FRE ) rose 2c to $3.28 ahead of its interim result on Monday.

The benchmark NZX-50 index closed up 3.301 points, or 0.098%, at 3386.475. Turnover was worth $117.8 million. There were 37 rises and 24 falls among the 113 stocks traded.

AMP Capital Investors' head of equities Guy Elliffe said the local earnings season will be mixed with cautious outlook statements. Earnings will rebound in 2011 and by 2012 companies may be producing double-digit earnings growth.

"There is no reason to be overly concerned. We think the season will be okay," Elliffe said.

Merger and acquisition activity is also a driver of the market at the moment. Fletcher Building (NZX: FBU ) rose fell 7c to $8.15 on a day Finance Minister Bill English warned of the possibility of a double-dip recession but Fletcher's bid for Australia's Crane Group is expected to succeed.

PGG Wrightson (NZX: PGW ) is a more complicated situation and its share price was unchanged today at 59 as investors continue to wait to see if there will be a competing bid to Agria's partial takeover offer at 60c a share.

Cavalier Carpets (NZX: CAV ) was unchanged at $3.15 after a company it part owns filed an application to the Commerce Commission to buy the wool scouring assets of New Zealand Wool Services International even after being told they are not for sale.

Contact Energy (NZX: CEN ) fell 2c to $6.30, The Warehouse (NZX: WHS )  fell 4c to $3.59, Fisher & Paykel Healthcare (NZX: FPH )  fell 3c to $3.14 and Hallenstein Glasson (NZX: HLG ) fell 4c to $3.88.

Dual-listed ANZ (NZX: ANZ ) rose 7c to $32.73 on a day Commonwealth Bank of Australia reported strong earnings, including for its New Zealand unit ASB. Westpac (NZX: WBC ) rose 80c to $31.70.

Xero (NZX: XRO ) fell 6c to $2.59. Infratil (NZX: IFT ) rose 1c to $1.95, Port of Tauranga (NZX: POT ) rose 5c to $7.73 and Methven (NZX: MVN ) rose 5c to $165. DNZ Property (NZX: DNZ ) rose 1c to $1.22 on good volume.

In the US, the Dow Jones industrial average closed its seventh straight day of gains after McDonald's surprisingly strong sales drove confidence in the economic recovery. Light volume, however, called the rally's strength into question.

Energy share weakness limited gains in the Standard & Poor's 500 and the Nasdaq Composite index after China, the world's second biggest energy consumer, raised interest rates for the second time in six weeks. The rate hike pressured commodities on fears of lower demand, but had little market impact outside that sector.

The Dow Jones gained 0.6% to 12,233.15, the S&P 500 gained 0.4% to 1324.57, and the Nasdaq gained 0.5% to 2797.05.



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