MARKET CLOSE: NZ shares gain; Telecom up, FPH down

MARKET CLOSE: NZ shares gain; Telecom lifts from low, FPH falls

May 26 (BusinessWire) – New Zealand shares gained as Telecom Corp. lifted from its two-decade lows and after a more bullish assessment of the outlook from Fonterra Cooperative Group lifted rural-related companies such as PGG Wrightson.

The NZX 50 Index rose from a 10-month low, gaining 7.36, or 0.2%, to 3011.18, only its second gain in nine sessions. Within the index, 29 stocks rose, 14 fell and seven were unchanged. Turnover of $132.2 million was lifted by trading in Fletcher Building, which rose from a three-month low.

Equity markets rose across much of Asia as beat-up stocks drew investors back into the market and after mining group Rio Tinto Group gave an upbeat assessment of demand from China for the next 15 years. Japan’s Nikkei 225 Index rose 0.7% and Australia’s S&P/ASX 200 Index advanced 1.4%, paced by Rio and other miners. On Wall Street, the Dow Jones Industrial Average ended its session above the psychologically important level of 10,000.

Fletcher, the biggest company on the exchange, gained 1.3% to $7.71. The stock’s relative strength index slipped below a reading of 20 yesterday, a level some technical analysts say is a signal it is poised to rise.

Telecom rose 2.7% to $1.90. The phone company is considering the structural separation of its network business, a sign it is serious about bidding for the lion’s share of the government’s $1.5 billion broadband rollout. Separation would risk a cut to Telecom’s A credit rating, Standard & Poor’s said last week.

NZ Farming Systems Uruguay, which develops dairy farms in South America, surged 7% to 46 cents, leading the NZX 50 higher after Fonterra Cooperative Group increase milk payment forecast stoked optimism global prices will rise in the next 12 months.

PGG Wrightson, the nation’s biggest rural services company, climbed 3.8% to 55 cents on the prospect of more funds flowing into dairy farms and support industries.

Fisher & Paykel Healthcare fell 4.4% to $3.25, a two-month low. The manufacturer posted a 15% gain in full-year profit to $71.6 million and forecasting 2011 profit of between $70 million and $75 million.

It forecast sales will grow by about 11% this year as it introduces its new range of ICON flow generators, ramps up research and development, bolsters sales and distribution teams and expands manufacturing capacity in New Zealand and Mexico.

F&P Appliances, which is also due to report earnings this week, fell 3.5% to 56 cents.

Kathmandu Holdings, the outdoor equipment chain, rose 2.7% to $1.92, leading gains in retailers. Hallenstein Glasson Holdings gained 2.4% to $3.40 and Pumpkin Patch rose 1.5% to $2.05.

Wakefield Health Ltd. was unchanged at $7.35 after saying a meeting of shareholders of Norfolk Investments failed to garner enough support for Wakefield’s takeover offer, which would give it a 60% stake in Tauranga’s Grace Hospital. Wakefield said it is now evaluating its options.

(BusinessWire)

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