MARKET CLOSE: Shares rise led by blue chips; Spark, AIA, SkyCity gain

New Zealand stocks rose, led by OceanaGold Corp as the price of gold gained when investors were spooked by a downgrade in the outlook for global economic growth. Spark New Zealand, Auckland International Airport and Meridian Energy gained. Metlifecare and other retirement village operators fell as new competitors come to market.

The NZX 50 Index rose 10.193 points, or 0.2 percent, to 5245.901, paring an intra-day drop of 0.6 percent to as low as 5,202.102. Within the index, 30 stocks rose, 14 fell and six were unchanged. Turnover was $113.9 million.

Markets across Asia fell after the International Monetary Fund cut global growth in 2015 to 3.8 percent from 4 percent and warned geopolitical tensions posed a risk to "frothy" equity markets. Japan's Nikkei 225 Index dropped 1.4 percent in afternoon trading, Hong Kong's Hang Seng Index declined 0.7 percent, as did Australia's S&P/ASX200 Index.

"It has been very volatile in the last couple of days globally," said Shane Solly, a director at Harbour Asset Management. "We're seeing markets reacting to some of the IMF's comments overnight about slower growth. It is not a surprise and the IMF does change its forecast rather regularly. Comments about bubbles in capital markets, and equity markets in particular, are again not a surprise, but always when these things get talked about it tends to spook investors."

OceanaGold Corp, the gold miner whose share price gyrates in response to gold market movements, rose 9.6 percent to $2.85, on thin volume. The spot price of gold has advanced some 1.8 percent over the past week as a weaker global oulook sees investors seek safe haven investments like the precious metal.

Blue chip stocks pulled the benchmark index higher in afternoon trading. Meridian, the state-controlled power company, advanced 1 percent to $1.46. Spark, formerly Telecom Corp, rose 0.3 percent to $2.96. Auckland International Airport gained 0.1 percent to $3.865. Chorus, the telecommunications network operator, climbed 2.7 percent to $1.88. Together the four stocks made up a third of the days total trades.

"When you look at the underlying fundamentals, they remain reasonably supportive. We are seeing low interest rates, modest growth and very low inflation which is generally supportive for equity markets," Solly said.

Yesterday, retirement village operator Regis Healthcare listed on the ASX, netting its owners A$734 million as they sold 71 percent of the company, with shares issued at A$3.65 apiece. The sector is in the midst of a sustained boom, as an ageing population on both sides of the Tasman stokes demand for retirement and respite care. Oceania Group, a New Zealand-based aged care business, is mulling either a trade sale or possible initial public offering on the NZX. Metlifecare dropped 2 percent to $4.48. Summerset Group Holdings declined 0.4 percent to $2.83. Ryman Healthcare fell 1.1 percent to $7.55.

"They have undoubtedly, over the last five years, been very strong performers," Solly said. "There are some competing investment options starting to emerge."

Air New Zealand was the worst performer on the benchmark index, slipping 2 percent to $1.92.

Kathmandu Holdings fell 0.3 percent to $2.95. The outdoor goods retailer's outgoing chief executive Peter Halkett sold 1.51 million of shares on market yesterday, reaping $4.4 million from the sale.

Outside the benchmark index, SeaDragon, which manufactures fish oil for health supplements, jumped 10 percent to 2.2 cents after it boosted first-half sales 17 percent to $2.45 million, having secured more supply of raw material to bolster production. The Nelson-based company has building consents for its new refining plant worth $7.5 million.

(BusinessDesk)