Sharemarket gains early

Wednesday 20th April 2011

Telecom shares rose in early trading after an announcement the company's joint venture with Vodafone has been chosen for the Government's $285 million Rural Broadband Initiative.

Shortly after the market opened Telecom's (NZX: TEL ) share price was up 4.5c to a six-week high 210.

That helped the benchmark NZX-50 index to be up 8.64 points to 3448.63 by 10.15am. It had ended down 25.2 points yesterday after a threat by Standard & Poor's to cut its AAA rating of US government debt and renewed worries about Europe's debt crisis spurred a sell-off in major world stock markets.

Hallenstein Glasson (NZX: HLG ) rose 3c early to $3.95, Sky City (NZX: SKC ) gained 2c to $3.41, Port of Tauranga (NZX: POT ) was up 2c to $8.48, Freightways (NZX: FRE ) was up 2c to $3.32, and Fletcher Building (NZX: FBU ) lifted 2c to $9.07 after losing 9c yesterday.

Stocks with falling prices included Contact Energy (NZX: CEN ), down 4c to $5.75, Mainfreight (NZX: MFT ) down 3c to $9.26, and Ebos Group (NZX: EBO ) down 7c to $7.43.

World stocks were up, recouping some of the prior day's losses, but nagging debt worries on both sides of the Atlantic and new signals of inflation dangers in China curbed appetite for risk.

MSCI's all-country world stock index rose 0.6%, retracing some of Monday's 1.6% loss, which was the biggest one-day drop in a month.

In the US, encouraging results from health care and materials companies lifted stocks, but weak earnings from Goldman Sachs limited gains in a market skeptical of the growth outlook.

Investors were reluctant to make big bets as the market readied for a spate of high-profile earnings. Volume was extremely low, with 6.65 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, well below last year's daily average of 8.47 billion.

Goldman Sachs posted a steep profit drop as trading revenue fell, the latest in a number of underwhelming reports from banks. The investment bank warned there were fewer opportunities to make money in the current environment.

The Dow Jones industrial average gained 0.5% to 12,266.75 at the close, the Standard & Poor's 500 Index added 0.6% to 1312.62, and the Nasdaq Composite Index advanced 0.4% to 2744.97.

NZPA

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