New Zealand shares followed the global rally after a surprise first-quarter profit for aluminium producer Alcoa and an upbeat view from the Federal Reserve's regional breakdown of the US economy stoked appetite for riskier assets.
BUSINESSDESK: New Zealand shares followed the global rally in stock markets after a surprise first-quarter profit for aluminium producer Alcoa and an upbeat view from the Federal Reserve’s regional breakdown of the US economy stoked investors’ appetite for riskier assets.
Heartland New Zealand led gains on the local market today.
The NZX 50 Index rose 21.7 points, or 0.6%, to 3,487.09. Within the index 29 stocks gained, 11 fell and 10 were unchanged.
Turnover was $84 million, of which $34.5m was trading in Fletcher Building.
Share markets across the Asia Pacific region joined in the global rally, with Australia’s S&P/ASX 200 index gaining 0.6% to 4272.7, Hong Kong’s Hang Seng up 0.4% to 20,229.28 and Japan’s Nikkei 200 index rising 0.6% to 9508.27 in afternoon trading.
“It looks like we continued on from reasonably positive sentiment from offshore markets,” said Craig Brown, senior investment analyst at OnePath New Zealand.
“There was a little of a rebound and bounce-back in a couple of stocks that have been sold off – Fletcher Building springs to mind.”
Fletcher gained 2.2% to $6.15, snapping six straight days of declines as investors become wary of a weak Australian housing market, delays to Christchurch’s rebuild, and a strong currency that cuts the price of foreign building product competitors.
Heavyweight stocks underpinned the NZX50’s gain, with Auckland International Airport climbing 0.6% to $2.47, Telecom gaining 0.6% to $2.51 and Contact Energy up 1.1% to $4.83.
Heartland was the biggest gainer on the benchmark index, up 8.2% to 53 cents, followed by Vector, which gained 3% to $2.74.
Michael Hill International rose 2.9% to $1.05 after the jewellery chain reported shrinking Australian sales in its third-quarter update.
Total sales rose 5.1% to $391m in the nine months ended March 31, though same-store sales in Australia fell 2.7% to $239m.
Chorus was unchanged at $3.44 after the fibre network company announced its first drawdown on the $929 million subsidy it’s receiving to roll-out high-speed internet cables through provincial and urban New Zealand.
Fisher & Paykel Healthcare continued to decline in the biggest fall of the day, dropping 1.4% to $2.17, a new month-low.
Brown said the stock’s weakness was all down to a strong New Zealand currency, with the manufacturer making half of its sales in US dollars.
“The business is going pretty well in terms of local currency basis,” and starts to struggle when it converts earnings into New Zealand dollars, Mr Brown said.
Dual-listed AMP declined 1.1% to $5.25 on the local market, while New Zealand Refining Company fell 1.1% to $2.70.
Shares in Seeka Kiwifruit Industries were unchanged at $1.80 after the kiwifruit grower’s board urged shareholders to vote against electing Craig Greenlees as a director at this year’s annual meeting.
The board said Mr Greenlees has a conflict of interest due to his ownership and management of rival DMS Progrowers.
Renaissance jumped 43%, or 6 cents, to 19.8 cents after being appointed a supplier of Apple products to the All-of-Government desktop and laptop procurement panel.
