MARKET CLOSE: NZ shares rise

New Zealand shares rose slightly on Friday, led by Summerset Group Holdings and Air New Zealand, while Steel & Tube Holdings also gained.

The S&P/NZX50 Index rose 13.21 points, or 0.2%, to 7133.26. Within the index, 26 stocks rose, 16 fell and eight were unchanged. Turnover was $111 million.

"We are a touch firmer but overall it wasn't a very good week for the market," said Grant Williamson, director at Hamilton Hindin Greene. "The market still seems to be under a bit of selling pressure but we have seen a rebound in certain stocks that have been sold off in recent times. It's a bit of a mixed bag; we've pretty much followed Australia."

Air New Zealand gained 1.8% to $1.745, bouncing off Thursday's two-year low.

"It's been hit very hard with investors thinking increased competition and slightly higher oil prices is going to have an impact on that company – to me, it looks like that's been a little bit overdone," Mr Williamson said. "In the past few weeks we've seen some foreign selling in our market, and we're starting to see the end of that."

The local index has dropped 3.1% this month as investors have grown increasingly wary about the US Federal Reserve hiking that country's interest rates, which would make the yields of New Zealand listed companies less attractive by comparison. However, the index is still up 12.6% this year.

"I think investors are a little bit nervous about what's happening overseas. We've had some small selloffs in the American market, and I think investors are being a bit cautious at the moment," Mr Williamson said. "This correction is relatively healthy, we've had two other corrections of a similar size this year. At this stage the market is still in an up trend but we'll just have to see whether buyers can get back in control at some point."

Summerset Group led the index on Friday, up 1.9% to $4.86. Contact Energy gained 1.7% to $4.90 and Xero rose 1.7% to $17.89.

New Zealand Refining Co was the worst performer, down 2.5% to $2.34 while Auckland International Airport dropped 1.8% to $6.62, Tower fell 1.6% to 90.5 cents and Trade Me Group shed 1.5% to $5.24.

Outside the benchmark index, Steel & Tube Holdings advanced 3.3% to $2.22. It will buy Composite Floor Decks, which supplies and installs composite floor decking, for $13.3 million, with a further $3 million possible based on its performance over the next two years.

Steel & Tube was a member of the S&P/NZX50 benchmark index until September and dropped out after the value of its shares hit their lowest level since 2001 in June at $1.79 following a difficult few months.

Scott Technology gained 4.8% to $2.20. Yesterday, it reported a record $11 million in full-year pre-tax profits, benefiting from rising interest globally in automation as companies seek to reduce costs and boost productivity.

"It came out with a very good result yesterday. They've had a nice rally over the past few months and this is the highest level they've been in a couple of years," Mr Williamson said.

Michael Hill International rose 3% to $1.74. The Hill family trust has sold down a tenth of its stake in Michael Hill International, in a move its founder and namesake Michael Hill says will enhance the stock's liquidity following its listing on the Australian stock exchange.

The trust, Hoglett Hamlet, sold 16 million shares to a number of unrelated parties for A$25.6 million. It had owned 164.3 million shares, or 42.9% of the jewellery chain, and now holds 38.9%.

(BusinessDesk)