MARKET CLOSE: Shares rise on optimism over Greek deal; Contact, Meridian gain

New Zealand shares rose, snapping four declines, as the prospect of a Greek deal calmed global markets and stoked investors' demand for riskier assets such as stocks. Power company Contact Energy led the benchmark index higher.

The S&P/NZX 50 index advanced 44.18 points, or 0.8%, to 5750.88. Within the index, 28 stocks gained, nine fell, and 13 were unchanged. Turnover was $138 million.

A provisional agreement opened the way for Greece to receive an €86 billion funding line and remain in the eurozone, though any deal is contingent on being ratified by the country's parliament. The European debt crisis has seen investors shy away from taking strong positions in equities and, since the Greek deal, the Chicago Board Options Exchange's Volatility, known as Wall Street's 'fear gauge,' has dropped from a five-month high. Stocks across Asia rose, with Australia's S&P/ASX 200 index up 2% in afternoon trading and Japan's Nikkei 225 index gaining 1.7%.

Contact led gainers, rising 2.9% to $5.05, followed by property investor Argosy Property, which rose 2.8% to $1.11, and telecommunications retailer Spark New Zealand up 2.3% to $2.84. Fletcher Building, the country's biggest construction company advanced 1.9% to $8.03.

"It takes at least one of the risks off the table as far as the EU actually coming to a decision, and that could have been relatively dire, so that's good news," said James Lindsay, who helps manage $400 million in equities at Nikko Asset Management in Auckland. "A number of those names [of companies that gained today] have been pretty weak over the last few days, and it's probably the ones some of the international investors have been selling on global risk-off trades."

Lindsay said next month's earnings season meant the local market would follow international cues more closely, with limited corporate news.

A weaker New Zealand dollar helped companies with large export earnings. Fisher & Paykel Healthcare, which derives about half of its sales in the US, gained 1.3% to $7.11.

Meridian Energy, the country's biggest electricity generator, gained 0.2% to $2.08 after its June operating statistics showed annual demand was 3.3% higher than a year earlier.

Auckland International Airport, the country's busiest gateway, increased 0.1% to $5.145.

Z Energy, the petrol station chain seeking to buy the Caltex and Challenge! brands from Chevron NZ, was unchanged at $5.82 after rival BP New Zealand Holdings reported a slump in annual profit in 2014, as cheaper oil prices eroded the value of its inventory.

Auckland lines company Vector was the biggest decliner on the day, falling 1.32% to $3.30, followed by pay-TV operator Sky Network Television, which slipped 1.1% to $6.10.

Outside the benchmark index NZ Refining, which operates the Marsden Point refinery, gained 1.7% to $3.06 after its May/June throughput report showed a first half processing fee of $170.9 million, $2.5 million more than the full year result for 2014.

Tapmaker Methven gained 1.8% to $1.13 after unveiling a three-year strategy to raise annual revenue 35% by 2018.

Kirkcaldie & Stains was unchanged at $2.20 after the unprofitable department store owner called for a special meeting on July 31, where shareholders will vote on whether to approve the sale of its business to Davy Jones, and an initial distribution to investors of $19.35 million, or $1.88 a share.

(BusinessDesk)