Market close: Stocks in positive mode as earnings season approaches

New Zealand stocks regained their positive tone today, with gentle rises across the board in light trading, affected by Wellington Anniversary Day and subdued global markets because of the Martin Luther King long weekend in the US.

The NZX 50 Index rose 21 points, or 0.5 percent, to 4185.18. Within the index, 31 stocks rose, 11 stocks fell, and eight were unchanged. Volume was relatively light, compared to trading last week, with a total value of $109.379 million.

Telecom led the index higher, followed by Fletcher Building.

It was also the first day the Fonterra Shareholders Fund was included in the index, at a weighting of 1.56 percent. After running up last week, FSF units were off 0.54 percent on the day, to close at $7.30.

Trade Me, whose index weighting increased to 3.6 percent, was down 0.74 percent to $4.05, after rising ahead of the index up-weight.

Index heavyweights Fletcher Building and Telecom, making up almost 25 percent of the index between them, were up 1.64 percent to $9.30 and 0.85 percent to $2.36, respectively.

"Looking at where portfolios are at the moment, Telecom offers reasonable yield, while Fletcher Building will benefit from recovery in New Zealand and Australia," says Shane Solly, at Mint Asset Management.

Steel & Tube, which may also benefit from the Christchurch post-quake rebuild spend, was third strongest gainer on the day, up 2 percent to $2.55, with the strongest rise going to childrens' clothing manufacturer Pumpkin Patch, up 3.01 percent to $1.37, and aged care provider Metlifecare, up 2.2 percent to $3.25.

The Warehouse Group came back up off recent lows to $3.15, up 0.61 percent.

"The theme from retail sentiment is that the Christmas and New Year trading was OK," Mr Solly says.

The proof would be in the mid-year earnings season, which is due to kick off in a fortnight, and will include the crucial Christmas and Boxing Day sale periods.

However, Mint would be "watching for companies coming out saying, 'err, we didn't quite make it'", especially if last year's pattern is repeated in 2013. "Expectations across the market have been pared back a long way," he says.

Expectations are for "high single digit, low double digit" profit growth, at best.

Otago and Philippines goldminer Oceana Gold led falls, down 1.15 percent to $3.45.

(BusinessDesk)