MARKET CLOSE: NZ shares follow Asia higher led by blue chip stocks Spark, F&P Healthcare

Tuesday 1st August 2017

New Zealand shares rose, following Asia higher, as blue chip stocks including Spark New Zealand and Fisher & Paykel Healthcare helped drag the benchmark index up, offsetting a bigger number of smaller firms declining.

The S&P/NZX 50 index increased 35.45 points, or 0.5 percent, to 7729.44. Within the index 16 stocks gained, 21 fell and 13 were unchanged. Turnover was $139 million.

Stocks across Asia gained, followed Wall Street's cue where the Dow Jones Industrial Average reached a new record as US company earnings continued to largely beat expectations while low interest rates continue to drive the allure of equities. Australia's S&P/ASX 200 index was up 0.98 percent in afternoon trading while Japan's Topix gained 0.5 percent and China's Shanghai Composite increased 0.4 percent.

Spark led the NZX 50 higher, rising 2.9 percent to $3.86. Sky Network Television gained 2.1 percent to $3.38, Metlifecare increased 2 percent to $5.70 and F&P Healthcare climbed 1.6 percent to $11.14.

"When you've got three of the biggest stocks in the market in the top five, that's going to offset the smaller companies," said James Smalley, a director at Hamilton Hindin Greene in Christchurch.

Other stocks to gain included Xero, which rose 1.6 percent to $26.80, its sixth day of increases and its highest close in two years. Smalley said the accounting software firm's last update, where it said it was breaking even on a cash flow basis, might be giving investors more confidence in the company to justify a higher price.

Fletcher Building also gained for a sixth day, rising 0.3 percent to $8.01. Smalley said the country's biggest construction company had provided investors with some comfort that the board was taking its recent earnings downgrades seriously.

Investors are waiting for company earnings to start in earnest next week, and Smalley said some of the bigger falls on the day were probably people cashing in profits on stocks that had enjoyed recent gains. Those included Metro Performance Glass, which dropped 2.6 percent to $1.50 in the largest decline on the day, Genesis Energy down 2 percent to $2.43 and NZX which fell 1.7 percent to $1.16.

Auckland International Airport slipped 0.2 percent to $6.945 after the country's main air hub said it might need balance sheet support towards the end of the regulated period from 2018 to 2022 as it rolls out a $1.9 billion investment programme to upgrade its infrastructure.

Outside the benchmark index, Moa Group rose 2 percent to 50 cents after the craft beer brewer raised $329,000 at a premium price of 52.34 cents per share, and announced a reshuffle of its board with Allan Scott stepping down and replaced by former Fonterra Cooperative Group senior manager Sheena Henderson.

Airwork Holdings increased 0.7 percent to $4.40 after refinancing and increasing its banking facility by US$60 million to US$195 million.

(BusinessDesk)

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