Healthy week for stocks

ELOISE GIBSON
Last updated 18:24 25/01/2013

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New Zealand stocks rose today, rounding off a week of straight gains, on the back of an accumulation of broadly positive news about the global economy.

NZX led the gainers and OceanaGold fell.

The NZX50 Index rose 9.9 points or 0.23 per cent to close at 4,199.82.

Within the index, 16 stocks rose and 27 fell.

Despite the market gaining the kiwi slipped against the greenback, recently trading at US83.55c, down from US83.77c this morning. On the Trade Weighted Index against major trading partners' currencies it was 75.40, down from 75.60 this morning.

NZX, the market operator, led gainers on the local stock market, rising 2.29 per cent to $1.34.

Fisher and Paykel Healthcare Corp, the makers of breathing masks and respirators, rose 2.05 per cent to $2.49.

Telecom, the country's biggest phone company, broke out of its recent range to rise 1.93 per cent to $2.38.

Craig Brown, a senior investment analyst at One Path, said investor sentiment was gradually improving on an accumulation of positive or neutral data suggesting the global economic recovery was on track.

''It is a continuation of an underlying trend of people continuing to get comfort from the way the world is heading in the financial markets and taking on a little more risk. Every time you get another data point that is not bad, it helps build up the support levels,'' said Brown.

The U.S. debt ceiling has been pushed out, Japan is stimulating their economy and data suggesting German growth picked up boosted hopes for a swifter euro zone recovery. Manufacturing in China and the United States grew this month at the fastest pace in about two years.

In New Zealand, the government's fiscal deficit for the first five months of the 2012/13 fiscal year was slightly better than forecast because of a higher than expected tax take, the Treasury said today.

However: ''It would only take one bad number to spook everybody again,'' said Brown.

OceanaGold Corp, the miner which operates the Macraes and Reefton goldfields, led the decliners, falling 2.35 per cent to $3.32.

PGG Wrightson, the rural services company, fell 2.27 per cent to 43c.

Pumpkin Patch, the children's clothing chain, fell 2.24 to $1.31. The recently listed Fonterra Shareholders' Fund fell 1.09 per cent to $7.23 following news that traces of DCD, a product used to reduce pollution in waterways, had been found in New Zealand milk.

While the Ministry for Primary Industries says there are no food safety or health risks, the detection of dicyandiamide (DCD) has led to the product being pulled from the market.

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On the currency markets the New Zealand dollar fell against the greenback.

The kiwi recently traded at US83.55c, down from US83.77c this morning.

Dan Bell, senior currency dealer at HiFX, said the shine had come off the kiwi for now. ''Obviously the NZ dollar has had a very good start to the year and has been trading close to six month highs over the past week, although we did see a sharp drop overnight.''

The New Zealand dollar slumped against the greenback last night as North Korean threats of further nuclear testing sent jitters through the market.

''There's a bit of a pullback occurring in commodity currencies like the NZ dollar,'' said Bell. ''And the environment in Australia is going to have an impact.''

The Australian dollar sank after a Reserve Bank of Australia board member talked about having to "actively manage" the economy, a veiled reference to further interest rate cuts.

''The market anticipates further interest rate cuts in Australia and that's also giving the market a reason to question the outlook for New Zealand monetary policy,'' said Bell.

On the crosses, the kiwi recently traded at 80.0 Australian cents, down sharply from A83.77 this morning, and 75.60 yen, up from 75.34 yen earlier. The kiwi traded 62.55 at euro cents, down from 62.65  euro cents earlier, and 52.96 pence, down from 53.05 p earlier.

Bell said the kiwi may trade in the range between US83.30c and US83.90c overnight.

The 90 Day Bank bill rate was 2.7 per cent.

- BusinessDay

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