MARKET CLOSE: NZX 50 gains to 2-month high; MHI, Rakon gain

Friday 17th April 2009

Shares rallied, pushing the NZX 50 Index to a two-month high, as investors were buoyed by global economic data and corporate earnings that may herald an easing in the worldwide slump.

The NZX 50 climbed 48.13, or 1.8%, to 2711.26, the fifth straight daily gain to the highest since February 13. Within the index, 31 stocks rose, eight fell and 11 were unchanged. Turnover was $96.6 million.

Michael Hill International rose 5.6% to 57 cents. The jewellery chain counts Australia as its biggest market, where today Woolworths, that nation's biggest retailer, posted a bigger-than-expected 6.5% gain in quarterly sales to A$12.3 billion. Pumpkin Patch, the children's clothing chain that has 107 Australian stores, climbed 2.6% to $1.17.

Shares rallied on Wall Street after JPMorgan Chase, the second biggest U.S. bank by assets, posted first-quarter earnings that beat expectations. After the close of trading, Google Inc. posted an 8.9% increase in quarterly profit. The Dow Jones Industrial Average rose 1.2%. In Japan today, the Nikkei 225 Index climbed 1.7% to 8907.58 after Toshiba Corp. reported a smaller-than-expected operating loss.

In New Zealand, the 10 biggest companies on the exchange gained, except for Auckland International Airport, which was unchanged at $1.70.

"The time for being ultra-conservative is past," said Stephen Walker, head of asset management at Goldman Sachs JBWere. "In terms of moving your portfolio from a more conservative position to a more cyclical position, you should be around neutral at the moment rather than taking a big bet either way," he said.

Government figures today showed annual inflation eased to 3% in the first quarter, back within the central bank's 1% to 3% band, which stoked expectations Governor Alan Bollard will cut the official cash rate by 50 basis points to 2.5% at the end of the month.

Bollard has room to cut the OCR to 2% this year, with the economy forecast to contract 2.8%, the Organisation for Economic Cooperation and Development said in a report yesterday.

Fletcher Building, New Zealand's biggest construction company, rose 0.5% to $6.76, the highest level since October 3.

Nuplex Industries rose 5.7% to 37 cents, leading the NZX 50 higher. Shares of the specialty chemicals maker are down 69% this year. Rakon, the maker of components for navigation systems, rose 5.5% to $1.34. The shares have more than doubled since sinking to 63 cents on March 3.

Sky Network Television rose 4.9% to $4.25. Of nine analysts who follow the stock, four rate it as 'buy' and three recommend it as 'outperform,' according to Reuters.

Infratil, the investment group that controls TrustPower Ltd., climbed 5.3% to $1.58. Three of five analysts who follow the stock rate it a 'buy,' according to Reuters.

Telecom, the biggest company on the NZX 50, rose 3.7% to $2.54.

Businesswire.co.nz

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