Stocks hold onto thin gains

05:07, Feb 13 2013

The New Zealand share market eked into the black, helped by a rally across the Tasman, with the start of the Australian earnings season spurring demand for higher yielding or riskier assets.

Westpac led gainers after a strong result from fellow bank CBA boosted financial stocks. Rakon plunged after slashing its earnings outlook, and Goodman Fielder fell after normalised earnings came in weaker than expected.

The NZX 50 Index rose 3.27 points, or 0.08 per cent higher, to close at 4221.39. Within the index 17 stocks rose, 23 fell, and 10 were unchanged.

Across the Tasman, Australia's S&P/ASX 200 Index rose 1 per cent to 5008.40 on the back CBA posting a record first half profit of A$3.78 billion.

That spurred investors demand for financial stocks, with Westpac gaining 2.2 per cent to $35 on the NZX.

Forsyth Barr's David Price said the market looked vulnerable to a correction after a 4 per cent gain in January, with negative earnings surprises likely trigger quick sell offs.

That was in evidence today, with Rakon plummeting 32 per cent to 26c after it announced operating earnings for the year ending March 31 will be between $5 million and $7m - instead of the $8m-$12m forecast in December.

Goodman Fielder, the food ingredient maker, fell almost 6 per cent to 84c after normalised net profit - excluding gains from business and asset sales and restructuring costs - fell 4 per cent year-on-year to A$41.2m.

SkyCity Entertainment, the casino and hotel operator, rose 0.3 per cent to $4.01.

The firm announced a reported net profit of $66.3 million for the six months to December. That was 15 per cent down on the same time the previous year when the country played host to the Rugby World Cup, a move which Price said was broadly expected by the market.