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New Zealand stocks rose as investors gauged the potential for listed companies to deliver earnings growth when results season kicks off next month. Air New Zealand led gainers, having sold off on Friday after a Malaysian passenger plane was shot down. Sky Network Television and Telecom paced the advance.
The NZX 50 Index rose 17.973 points, or 0.4 percent, to 5126.899. Within the index, 24 stocks rose, 18 fell and eight were unchanged. Turnover was $102.7 million.
"We've gone through a strong period of growth and some of that's starting to flow through to companies," said Craig Stent, director at Harbour Asset Management. "Having said that, there is still a bit of uncertainty out there, and the currency is still playing a part in terms of translation of earnings. On balance we're still seeing results might be okay but outlook statements might be a bit cautious.
The New Zealand market is trading at about 16 times per-share earnings "so the earnings do need come through to justify the high valuations."
Air New Zealand led the benchmark index higher, up 4.6 percent to $2.04. It was among decliners at the end of last week as investors digested the news that the Malaysia Airlines flight was shot down over eastern Ukraine.
Telecom, New Zealand's largest telecommunications provider, rose 1.6 percent to $2.845 and Sky TV rose 2.1 percent to $6.70. Genesis Energy advanced 1.4 percent to $1.85, leading gains among power companies. Contact Energy increased 1.3 percent to $5.44. Meridian Energy lifted 1.2 percent to $1.255 and MightyRiverPower rose 1.1 percent to $2.30.
Growth stocks fell. A2 Milk was the worst performer on the day down 6.2 percent to 61 cents. Pacific Edge, the Dunedin-based biotech company, slid 5.6 percent to 68 cents. Outside the benchmark index, SLI Systems, the search engine developer, dropped 2.9 percent to $1.36. Xero, the cloud-based accounting software, rose 0.2 percent to $23.55, paring some of Friday's decline.
Geopolitical tension "is in the back of the mind of most investors, but the US bounced on Friday reflecting some lessening of those concerns," Stent said. "The more high risk-stocks, if the world does fall apart, do get torched a bit."
Ryman Healthcare fell 0.7 percent to $8.35. The country's biggest listed retirement village builder and operator bought an 8.9 hectare undeveloped residential block in Auckland's south eastern for a $120 million project in the city.
Rival retirement village operators were mixed. Summerset Group Holdings slipped 0.6 percent to $3.26, while Metlifecare rose 0.2 percent to $4.47.
Fletcher Building, the nation's biggest listed company, lifted 0.1 percent to $8.90. Auckland International Airport slipped 0.3 percent to $3.79. Steel & Tube Holdings climbed 1 percent to $3.03.