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BUSINESSDESK: New Zealand shares rose, nudging the NZX 50 to a new four-year high, paced by the NZX, Trade Me and Fletcher Building after the US Federal Reserve announced further measures to bolster growth in the world’s biggest economy.
The NZX 50 Index rose 6.3 points, or 0.2%, to 3792.34, the highest close since January 2008. Within the index, 23 stocks rose, 14 fell and 13 were unchanged. Turnover was $108 million.
The Federal Reserve plans to expand its holdings of long-term securities with open-ended purchases of $US40 billion of mortgage debt a month and pledged to keep interest rates at record lows until at least mid-2015.
Equity markets across Asia joined a rally in US stocks following the Fed’s statement.
"The Fed stimulus and obviously with interest rates staying lower for longer means money is coming out of bank deposits into equities," says Bryon Burke, head dealer at Craigs Investment Partners.
NZX, the stock exchange regulator, rose 2.8% to $1.11. Fletcher Building, New Zealand's largest construction company, was up 1.6% to $6.80, the highest since late March. Cavalier, New Zealand's only listed carpet market, gained 1.1% to $1.82.
Trade Me rose 1.8% $4.01. On Thursday, NZX said the online auction site will replace Nuplex Industries in the NZX20, an index launched six months ago to encompass the stock exchange's 20 largest and most-liquid companies.
Nuplex Industries, the specialty chemicals maker, rose about 1%to $3.20. The stock has gained 38% so far this year.
The gainers were led by OceanaGold, who operates the Macraes goldfield near Dunedin, up 8% to $3.65 as spot gold climbed to $US1774.54 an ounce, a seven-month high, after the Fed’s statement.
The decline was led by Fisher and Paykel Healthcare, which gets more than 50% of its revenue in US dollars. It fell 6.6% to $2.11 as the New Zealand dollar rose to a six-month high against the greenback.
"It’s the most highly leveraged stock on the New Zealand market" to the currency, Mr Burke says. "It's now just about one of the worst-performing stocks on the NZX 50."
Fisher and Paykel Appliances fell 0.4% to $1.175, having soared this week in the wake of Chinese-based Haier’s proposal to buy the 80% of the company it does not already own for $1.20 a share.
Telecom, the largest company on the exchange, fell 0.6% to $2.48.
Windflow Technology, the wind turbines manufacture, was unchanged at 17 cents and has shed 47% this year. It missed the deadline for filing its annual results yesterday, saying a director is overseas, and has told the stock exchange it will file the report on Monday.