MARKET CLOSE: Sharemarket rises slightly

Thursday 28th April 2011

The New Zealand sharemarket posted modest gains today after offshore markets rose and the Reserve Bank of New Zealand (RBNZ) said the current level of the official cash rate was likely to remain appropriate for some time.

The benchmark NZX-50 index closed up 11.717 points, or 0.336%, at 3503.76 after opening up around 4.02 points.

The market opened after Reserve Bank Governor Alan Bollard left the official cash rate unchanged at 2.5%.

"Investors are chasing yield with the potential for interest rates to stay lower. I think we will see bank term deposits being converted into equities," Grant Williamson, director at Hamilton, Hindin, Greene, said.

Telecom (NZX: TEL ) rose 7c to $2.18.5 and SkyCity (NZX: SKC ) rose 5c to $3.53 and property trusts were firm.

Contact Energy (NZX: CEN ) rose as high as $6.00 and closed down a cent at $5.85 after announcing rights issue at $5.05 to raise $350 million. Williamson said the issue had been well flagged.

"It is only a one for nine so it is not a huge burden on shareholders and I think investors like the story," he said.

Otherwise the market was firmer on the back of higher offshore markets and a fall in the New Zealand dollar against the Australian dollar was also helpful to exporters.

Fletcher Building (NZX: FBU ) gained 2c to 49.16, NZX (NZX: NZX ) rose 3c to $2.27 and Vital Healthcare (NZX: VHP ) rose 2c to $1.13. The Warehouse (NZX: WHS ) rose 3c to 43.60 and TrustPower (NZX: TPW ) rose a cent to 47.52.

Restaurant Brands (NZX: RBD ) eased 3c to 42.46 and NZ Refining (NZX: NZR ) eased 3c to $4.38. Mainfreight (NZX: MFT ) eased 5c to $9.25. Xero (NZX: XRO ) fell 6c to $2.50. Goodman Fielder (NZX: GFF ) fell 13c to $1.44 after its cut its profit forecast today.

OceanaGold (NZX: OGC ) rose 22c to $3.72 ahead of its first-quarter profit result after the Australian market closes.

In the US, the Nasdaq Composite Index jumped to a 10-year high as stocks rallied after Federal Reserve chairman Ben Bernanke's first-ever press conference did nothing to short-circuit investors' optimistic outlook on the economy.

All three major US stock indexes extended gains after Bernanke reiterated the Fed's stance that inflation was a transitory problem related largely to commodity price pressures.

Tom Sowanick, chief investment officer of OmniVest in Princeton, NJ, said the Federal Reserve is "inviting asset inflation" as reflected in the stock market's price action.

The Dow Jones industrial average gained 0.8% to 12,690.96, the Standard & Poor's 500 Index rose 0.6% to 1355.66, and the Nasdaq Composite Index climbed 0.8% to 2869.88.

NZPA

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