Market close: NZ gains as yields appeal, RBA cuts rates, Fletcher up

BUSINESSDESK: New Zealand stocks rose as investors were drawn to stocks with relatively appealing dividend yields and after a bigger than expected rate cut in Australia, the biggest offshore market for companies including Fletcher Building and Pumpkin Patch.

The NZX 50 Index rose 21.44 points, or 0.6%, to 3577.31.

Within the index, 29 stocks rose, 10 fell and 11 were unchanged. Turnover was a lower-than-average $76.4 million.

Fletcher, the nation's biggest construction group, rose 1.6% to $6.36.

Reserve Bank of Australia governor Glenn Stevens said today that housing prices have shown signs of stabilising, although the market remains subdued.

He cut the cash rate to 3.75%.

Telecom, the biggest company on the bourse, edged up 0.2% to $2.635, the highest since the spin-off of the Chorus network business last November.

Telecom has a dividend yield of 11.4%.

"We have seen more money flow into higher yielding and top stocks - that trend has continued today," said Bryon Burke, head dealer at Craigs Investment Partners.

"There has been a more positive outlook given good corporate results out of the US over the last week."

Pumpkin Patch, the children's clothing chain that counts Australia as its biggest market, rose 2% to $1.02.

Ryman Healthcare, the retirement village operator, rose 2.2% to a record $3.24. 

Rakon, the GPS components maker, led the bourse higher, climbing 6.3% to 51 cents after it said it will tap businessman Peter Springford to join the board.

Mr Springford has considerable experience in China.

Chorus rose 2.9% to $3.43 after fund manager AMP Capital NZ was granted government approval to exceed the 10% shareholding cap.

The fund manager can buy up to 15% of the telecommunications network company.

PGG Wrightson was the biggest decliner in the benchmark index, falling 5.1% to 37 cents.

Pyne Gould Corp, which holds a stake in Wrightson, fell 5.9% to 32 cents after the wealth manager's auditor, KPMG, quit amid different opinions over the level of disclosure required for related party transactions and the adequacy of the George Kerr-controlled company's governance.

Fast-food franchise operator Restaurant Brands dropped 1.5% to $2.02.

Vital Healthcare Property Trust shrank 1.2% to $1.23 after the healthcare building investor spent $A12.3 million buying a new hospital in Sydney.

Contact Energy was unchanged at $4.85 after the power company flagged a substantial boost to cashflow from 2014 after it shelved plans for its hydro-projects on the Clutha River indefinitely.