MARKET CLOSE: NZ shares join global Trump rally, lacklustre earnings stifle gains

New Zealand shares rose, joining a global rally as US President Donald Trump's proposed US$1 trillion of infrastructure spending and aspirations to drive American economic growth stoked investor optimism. Summerset Holdings and Metlifecare gained in the wake of better earnings results in a lacklustre reporting season.

The S&P/NZX 50 index gained 27.05 points, or 0.4 percent, to 7175.83. Within the index, 36 stocks gained, nine fell, and five were unchanged. Turnover was $115.9 million.

Stocks markets across Asia followed Wall Street higher after Trump's speech to the Joint Session of Congress dialled back the overblown rhetoric of the campaign that's dogged his early appearances, even if it didn't provide much more detail on his planned infrastructure and tax packages. Australia's S&P/ASX 200 Index was up 1.1 percent in afternoon trading and South Korea's Kospi 200 gained 0.8 percent.

"New Zealand does appear to be lagging behind," said Grant Williamson, a director at Christchurch-based Hamilton Hindin Greene. "Investors are starting to see there's a large number of stocks that are fully-priced on the earnings they reported and it's getting more difficult for investors to find value in this market."

Williamson said retirement village operators Metlifecare and Summerset were two of the better performers on the day, and also stood out with stronger-than-expected earnings during the reporting season. Summerset rose 1.9 percent to $5.40 and Metlifecare gained 1.7 percent to $6.05.

"Those two reported earnings above expectations," he said. "Both Metlifecare and Summerset learned a valuable lesson off Ryman a number of years ago that there are very good margins in development."

Ryman Healthcare fell 1 percent to $8.83.

Fisher & Paykel Healthcare, which is seen as a proxy for sentiment about the US market given its reliance on sales into the US and Mexican manufacturing, rose 0.8 percent to $9.28.

Comvita led the market higher, up 3 percent to $7.49, while Trade Me Group was up 1.9 percent to $5.34.

Warehouse Group posted the biggest fall on the day, down 2.7 percent to $2.55. The country's biggest listed retailer is set to report first-half earnings next week, having recently announced plans to strip up to $20 million of annual spending in an organisation restructure.

Sky Network Television fell 2.4 percent to $3.71. The pay-TV operator this week said it hadn't given up on a planned merger with Vodafone New Zealand after getting it shot down by the Commerce Commission, with both parties declining to trigger a termination clause.

Among blue chip stocks, Spark New Zealand declined 0.8 percent to $3.525, Fletcher Building rose 1.3 percent to $9.73 and Auckland International Airport fell 1.2 percent to $7.26.

CBL Group rose 6.1 percent to $3.15, recovering from a 20 percent drop over the past week. The credit surety and financial risk insurer gave guidance for operating earnings to rise by up to 22 percent this year, building on a 27 percent gain in 2016.

(BusinessDesk)