Market close: NZ shares rise on 'random order flow,' Hellaby up

Z Energy shares rose as a fresh deal attracted investors to the petrol retailing sector.

New Zealand shares rose on light volume, with A2 Milk Co, Z Energy and Air New Zealand all gaining, while Freightways dropped.

The S&P/NZX 50 Index edged up 16.49 points, or 0.2%, to 6,892.28. Within the index, 32 stocks rose, 11 fell and seven were unchanged. Turnover was light at $65.8 million.

"It's a series of price moves driven by the existence of an order or not in a market that's pretty illiquid today," said Matt Goodson, managing director at Salt Funds Management.

"You have the odd counter-intuitive move, our market's up fractionally despite quite a weak lead from the US. Really it's just random order flow in the market driving a few things around."

A2 led the index, up 2.4% to $2.12. The milk marketer's shares have been dragged this month after Australian rival Bellamy's was placed in a trading halt but began recovering when it gave a market update on December 21.

"Bellamy's has been a reminder of some of the risks in the sector though it appears to be more a case of supply contracts causing their trouble, and A2's in quite a different situation, but those issues have put a bit of a lid on A2," Mr Goodson said.

"It's an interesting stock; it's certainly been very volatile over the past 12 months, reacting very sharply to both perceived good news and bad news."

Z Energy gained 2.4% to $7.22.

"It did get sold off a few days ago on the entry of Caltex Australia purchasing Gull. The thought process was someone with very deep pockets, enough to maybe fund their own infrastructure, would be a stronger competitor," Mr Goodson said.

"I guess the counterview would be that it's someone who knows how to maintain price discipline in the market, and since then we've seen BP pay what seems to be a very aggressive price for Woolworths in Australia, and people are looking at that so Z's bounced a bit in the last day or two."

Air New Zealand rose 2.4% to $2.17. It has dropped 20% this year, though the shares have rallied since the two-year low of $1.715 it reached in October.