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NZ Sharemarket Rises Slightly On Big News Day

Fuseworks Media
Fuseworks Media

Wellington, Feb 19 NZPA - The New Zealand sharemarket ended little changed today but there was plenty going on with investors reacting to corporate earnings, United States policy changes and a controversy over NZX50 index inclusion.

The benchmark NZX50 index closed up 5.318 points, or 0.171 percent, at 3107.088. Turnover was worth $82.3 million. There were 37 rises and 35 falls among the 112 stocks traded.

"The big news of the day was offshore-led," said James Lee, head of wholesale equities at First NZ Capital.

A move by the US to hike its discount, or emergency lending, rate just as the New Zealand sharemarket was opening, triggering weakness in many stocks.

"US futures sold off and investors are worried about removing liquidity in this environment," Mr Lee said.

Cyclical stocks were most affected. Fletcher Building fell 8c to 792, Freightways fell 2c to 301 and Fisher & Paykel Appliances fell 2c to 61.

Allied Farmers blamed a 1.4c fall in its share price to 11 on a decision by market operator NZX not to include it in the NZX50 index as earlier advised.

As the market closed NZX explained the decision was related to the impact on index parameters of the company's purchase of Hanover Finance.

Mr Lee said the stock price fell while the market waited for the explanation.

Rakon shares were unchanged at 99 after being volatile this week. Brokers have said a major seller was taken out when a line of 5 million shares traded yesterday.

OceanaGold fell 19c to 290 when it resumed trading after progressing a capital raising to fund a move to selling its gold on the spot market.

Auckland Airport rose 4c to 185 after advising the takeup on the retail part of its capital raising. Shares not taken up are sold in a bookbuild process on February 22. The airport reports earnings next Friday. Contact Energy, which reports on Tuesday, rose 5c to 570.

Telecom was unchanged at 234 and continued to be in the news for poor customer service.

Charlie's rose 0.3c to 9.6 after saying it no longer needed to undertake a capital raising. SkyTV rose 9c to 480 after announcing a 19 percent rise in interim profit. Pike River Coal was unchanged at 93 on a day in which it shipped its first export shipment.

US stocks rose for a third straight day on Thursday as investors viewed company results and manufacturing data as evidence the economic rebound would continue.

But stock index futures dropped steeply after the closing bell when the Federal Reserve announced it was raising the discount rate that it charges banks for emergency loans.

The Fed move, despite being a signal the economy is on the right track, marks a retreat from the easy money policy.

"The timing is most surprising. The last day of options expirations is tomorrow (Friday) and this is going to create a lot of angst and ruin a pretty good week we were having," said Richard Sparks, senior equities analyst at Schaeffer's Investment Research in Cincinnati, Ohio.

During the regular session investors accentuated the positive news, focusing on improved mid-Atlantic manufacturing data and setting aside a lackluster outlook from Wal-Mart and a surprising increase in weekly jobless claims.

The Dow Jones industrial average rose 83.66 points, or 0.81 percent, to 10,392.90. The Standard & Poor's 500 Index added 7.24 points, or 0.66 percent, to 1106.75. The Nasdaq Composite Index gained 15.42 points, or 0.69 percent, to 2241.71.

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