MARKET CLOSE: NZ shares rise as Fed spurs global rally; ANZ, Westpac gain, Chorus, Trade Me fall

New Zealand shares rose, led by Australia & New Zealand Banking Group, Westpac Banking Corp and Restaurant Brands New Zealand, after the US Federal Reserve kept to its plan of beginning a gradual increase in interest rates. Chorus and Trade Me Group fell.

The S&P/NZX 50 Index rose 17.39 points, or 0.29 percent, to 6088.33. Within the index, 28 stocks rose, 18 fell and 4 were unchanged. Turnover was $151 million.

On Wall Street, equity markets rallied after the Fed hiked rates for the first time in almost 10 years, while pointing to low inflation as a potential disruption to further increases. Gains flowed into Asia, with Japan's Nikkei 225 Index up 1.8 percent in afternoon trading, Australia's S&P/ASX 200 Index up 1.6 percent and Hong Kong's Hang Seng 1 percent higher.

"The commentary was perceived as a little more dovish than had been previously expected, and markets rallied accordingly," said Matthew Goodson, managing director at Salt Funds Management. "That's really spilled over to markets down under and across Asia. As always, when markets fall hard, we tend not to go down as much; when markets rise hard, we tend not to go up as much."

ANZ led the New Zealand index higher, rising 2.6 percent to $28.39 and Westpac gained 2.6 percent to $34.30.

Goodson said the banks' NZX shares tracked gains on the ASX. Banks tend to benefit from higher interest rates because they typically fund part of their loan book from deposits paying low or no interest.

"Australia's a whole different ballgame though, I would say they are a considerable distance from raising rates," he said.

Restaurant Brands rose 2.3 percent to $4.41. New Zealand's biggest fast food operator lifted third-quarter sales 9.4 percent, faster than the 6.4 percent pace it achieved a year earlier, on sales of KFC fried chicken and expansion at its new Carl's Jr burger chain. Goodson said the quarterly growth was "largely as analysts expected."

Spark New Zealand rose 0.2 percent to $3.155. The telecommunications retailer will increase the price of its broadband and landline plans from the beginning of February, following the Commerce Commission's decision to allow Chorus to raise the cost of access to its copper wire network.

Chorus dropped 2.1 percent to $3.67, continuing to come off the record high of $3.84 it reached on Tuesday after the Commerce Commission's decision was announced.

Trade Me fell 1.9 percent to $4.09, and has risen 14.3 percent this year. The Commerce Commission today filed proceedings in the Auckland High Court against realtors including Barfoot and Thompson, Harcourts Group, LJ Hooker New Zealand, Ray White Real Estate and Bayley Corp, alleging the real estate firms colluded in agreeing to pass on increased Trade Me fees for property listings as part of a response to the auction site's increasing dominance in the market.

"I think it's just Trade Me retracing after several very strong weeks rather than falling on that news," Goodson said. "It's hard to view it as a positive for Trade Me as much as a shot across the bows of a competitor."

Solution Dynamics rose 10 percent to $1.65. The NZAX-listed software company raised its forecast for annual profit following better-than-expected trading. Its shares jumped to a record.

(BusinessDesk)