MARKET CLOSE: NZ shares join global rally after upbeat US jobs report, led by Aussie banks

Monday 11th July 2016

New Zealand shares joined a global rally in equity markets with an upbeat US employment report giving investors confidence in the strength of the world's biggest economy, while an outcome in Australia's federal election boosted stocks across the Tasman.

The S&P/NZX 50 index rose 62.35, or 0.9 percent, to 7062.45, a new record close. Within the index, 37 stocks gained, seven fell, and six were unchanged. Turnover was $105.8 million.

Stock markets across Asia followed gains on Wall Street and in Europe on Friday when faster than expected jobs growth in the US allayed fears the world's biggest economy may slip into recession, while slow wage inflation meant the Federal Reserve may not be inclined to hike interest rates again this year.

Investors also took heart from Japanese Prime Minister Shinzo Abe claiming victory in an election for the upper house of parliament and Australia's leader Malcolm Turnbull winning a tight race after a week of uncertainty. Japan's Nikkei 225 index was up 4.5 percent in afternoon trading and Australia's S&P/ASX 200 index gained 1.8 percent.

"The markets are continuing on from the rally in the States on Friday night," said Shane Solly, portfolio manager at Harbour Asset Managment in Auckland. "Wider Asia is having a particularly good day - we've held up relatively well while other markets have been down, so we're going to lag a little bit."

Australia's dual-listed banks led the local market higher, with Westpac Banking Corp up 4 percent to $30.20 and Australia and New Zealand Banking Group gaining 3.3 percent to $24.78.

Construction and building products firm Fletcher Building rose 2.2 percent to $8.77 and telecommunications group Spark New Zealand gained 1.6 percent to $3.82.

Harbour's Solly said Fletcher was lifted by a rally in building materials companies in Australia, while Spark continued to offer an attractive dividend yield, which appeals to international investors in a low interest rate environment.

Software developers Orion Health Group and Xero were up 3.6 percent to $4.90 and 2.5 percent to $18.14 respectively.

Kiwi Property Group rose 1.3 percent to $1.535. The real estate investor's board will ask shareholders for a pay-rise at this month's annual meeting.

Infratil shares gained 0.6 percent to $3.29 after the infrastructure investor said its acquisition of Canberra Data Centres would be delayed by the slow outcome of Australia's election.

Warehouse Group, the country's biggest listed retailer, rose 1.1 percent to $2.81 after government figures showed retail spending on credit and debit cards rose 1.2 percent in June. Online auction site Trade Me Group was up 1.3 percent to $4.87.

Auckland International Airport rose 0.3 percent to $6.98 and Air New Zealand shares increased 0.2 percent to $2.15 after China's Tianjin Airlines said it plans to start operating a service to New Zealand from December this year.

The Fonterra Shareholders' Fund posted the biggest fall on the day, with the units down 0.9 percent to $5.41. Other stocks to fall include Heartland Bank down 0.8 percent to $1.24, Skellerup Holdings dropping 0.8 percent to $1.24, and Genesis Energy slipping 0.2 percent to $2.13.

Outside the benchmark index, T&G Global was unchanged at $2.50. Chinese fruit firm Golden Wing Mau Agricultural Produce built up a 19.99 percent stake, paying an 18 percent premium to make it the second biggest shareholder in the local company.

On the NZAX, GeoOp shares climbed 11 percent to 31 cents after the management app developer said annual revenue beat expectations, while Geneva Finance fell 3.2 percent to 46 cents after declaring a special dividend payable in August.

BusinessDesk.co.nz

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