MARKET CLOSE: NZ shares join global rally after upbeat US jobs report

New Zealand shares joined a global rally in equity markets with an upbeat US employment report giving investors confidence in the strength of the world's biggest economy, while an outcome in Australia's federal election boosted stocks across the Tasman.

The S&P/NZX 50 index rose 62.35, or 0.9%, to 7062.45, a new record close. Within the index, 37 stocks gained, seven fell, and six were unchanged. Turnover was $105.8 million.

Stock markets across Asia followed gains on Wall Street and in Europe on Friday when faster than expected jobs growth in the US allayed fears the world's biggest economy may slip into recession, while slow wage inflation meant the Federal Reserve may not be inclined to hike interest rates again this year.

Investors also took heart from Japanese Prime Minister Shinzo Abe claiming victory in an election for the upper house of parliament and Australia's leader Malcolm Turnbull winning a tight race after a week of uncertainty. Japan's Nikkei 225 index was up 4.5% in afternoon trading and Australia's S&P/ASX 200 index gained 1.8%.

"The markets are continuing on from the rally in the US on Friday night," said Shane Solly, portfolio manager at Harbour Asset Managment in Auckland. "Wider Asia had a particularly good day – we've held up relatively well while other markets have been down, so we're going to lag a little bit."

Australia's dual-listed banks led the local market higher, with Westpac Banking Corp up 4% to $30.20 and Australia and New Zealand Banking Group gaining 3.3% to $24.78.

Construction and building products firm Fletcher Building rose 2.2% to $8.77 and telecommunications group Spark New Zealand gained 1.6% to $3.82.

Mr Solly said Fletcher was lifted by a rally in building materials companies in Australia, while Spark continued to offer an attractive dividend yield, which appeals to international investors in a low interest rate environment.

Software developers Orion Health Group and Xero were up 3.6% to $4.90 and 2.5% to $18.14 respectively.

Kiwi Property Group rose 1.3% to $1.535. The real estate investor's board will ask shareholders for a pay rise at this month's annual meeting.

Infratil shares gained 0.6% to $3.29 after the infrastructure investor said its acquisition of Canberra Data Centres would be delayed by the slow outcome of Australia's election.

Warehouse Group, the country's biggest listed retailer, rose 1.1% to $2.81 after government figures showed retail spending on credit and debit cards rose 1.2% in June. Online auction site Trade Me Group was up 1.3% to $4.87.

Auckland International Airport rose 0.3% to $6.98 and Air New Zealand shares increased 0.2% to $2.15 after China's Tianjin Airlines said it plans to start operating a service to New Zealand from December this year.

The Fonterra Shareholders' Fund posted the biggest fall on the day, with the units down 0.9% to $5.41. Other stocks to fall include Heartland Bank down 0.8% to $1.24, Skellerup Holdings dropping 0.8% to $1.24, and Genesis Energy slipping 0.2% to $2.13.

Outside the benchmark index, T&G Global was unchanged at $2.50. Chinese fruit firm Golden Wing Mau Agricultural Produce built up a 19.99% stake, paying an 18% premium to make it the second biggest shareholder in the local company.

On the NZAX, GeoOp shares climbed 11% to 31 cents after the management app developer said annual revenue beat expectations, while Geneva Finance fell 3.2% to 46 cents after declaring a special dividend payable in August.

(BusinessDesk)