MARKET CLOSE: NZ shares rise on bets Fed won't rush to hike; A2, Spark gain, Chorus falls

New Zealand shares rose, joining a global rally on speculation the US Federal Reserve will signal a slow pace of interest rate hikes tomorrow so as not to throttle economic growth. A2 Milk and Spark New Zealand gained, while Chorus fell.

The S&P/NZX 50 Index gained 30.38 points, or 0.5 percent, to 6070.93. Within the index, 25 stocks rose, 17 fell and 8 were unchanged. Turnover was $158 million

Shares rose across the Asia Pacific region following gains in the US and Europe ahead of the Fed announcement, where chair Janet Yellen is expected to raise the federal funds rate for the first time in almost a decade.

Peter McIntyre, investment adviser at Craigs Investment Partners, said the Fed would be cautious in its commentary around the decision, not wanting to slam the breaks on the US economy.

"The commentary will be well scrutinised, and I think it will be softly softly," he said. A hike "has been pretty well signalled, and it's on the back of some strong numbers from the US with regards to employment and how the economy is tracking."

A2 Milk gained 3.8 percent to $1.10. The infant formula marketer's stock was sold down following its 58 percent rally in early November. McIntyre said investors still believed in the company, and were buying it up while it was cheaper.

"It's one that rallied quickly and saw profit taking. The story's still strong, China's demand for infant formula is not going to go away." he said.

Spark reversed yesterday's fall, climbing 2.4 percent to $3.15. The stock fell after the Commerce Commission announced the price companies such as Spark and Vodafone will pay for wholesale access broadband service has been set at an average $41.69 a month over the next five years, up from the $38.43 price signalled in its previous determination.

"Some investors are looking and saying, that's a wee bit overdone really," McIntyre said. "Yesterday Spark got as low as $3.05 and closed at $3.07, they've been consistently trading around $3.15, so they've made back what they lost yesterday.

Chorus fell 2.3 percent from a record to $3.75, after yesterday's 24 percent rally on the back of the Commerce Commission decision.

"There's been a number of broker upgrades today for Chorus, a number of research analysts have definitely gone overweight on that stock," McIntyre said. "If a stock's going to rise 23.87 percent in one day, you've got those who are trading it who are looking to make some quick profits from a very strong bounce."

Kathmandu Holdings fell 1.9 percent to $1.54, and Trade Me Group dropped 1.9 percent to $4.17.

Vector declined 0.3 percent to $3.18 after shareholders in the gas and electricity distributor voted overwhelmingly to sell its gas transmission and distribution assets outside Auckland to Australian investor First State Funds for $952.2 million.

NZX-listed Kingfish rose 0.8 percent to $1.25. The investment company said it sold its stake in Sky Network Television because of concerns about the increased cost of delivering new services and the arrival of on-demand rivals such as Netflix and Lightbox.

Intueri Education Group was unchanged at 53 cents after the Financial Markets Authority said elements of its 2014 prospectus could have been more clearly and effectively described. In a statement after close of trade yesterday, Intueri said the FMA had recommended the company give further consideration to how student enrolment data is disclosed in future communications. No further action is to be taken by the regulator. The stock has fallen 80 percent this year.

(BusinessDesk)