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MARKET CLOSE: NZ shares rise on improved US-China trade outlook

Tuesday 5th November 2019

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(Nov. 4, 5:55 PM) New Zealand shares joined a rally across Asia as easing trade tensions between the US and China helped buoy investor sentiment. Exporter Fisher & Paykel Healthcare was among firms that gained. 

The S&P/NZX 50 Index increased 39.86 points, or 0.4 percent, to 10,801.55. Within the index, 23 stocks rose, 15 fell and 12 were unchanged. Turnover was $79.2 million. 

Stocks across Asia were higher, following the upbeat tone from Wall Street on Friday, as investors remained optimistic that a trade deal between US and China can be reached. US Commerce Secretary Wilbur Ross said over the weekend that licences for American firms to sell to Chinese telecommunications equipment make Huawei Technologies would be approved very soon. 

Hong Kong's Hang Seng was up 1.3 percent in afternoon trading, Australia's S&P/ASX 200 Index rose 0.2 percent, and South Korea's Kospi Composite Index advanced 1.1 percent. 

Peter McIntyre, an investment advisor at Craigs Investment Partners, said the easing trade tensions and stronger than expected US jobs data helped push Wall Street higher on Friday, and that had continued across Asia. 

"Those trade tensions lessening is a positive for Fisher & Paykel Healthcare," he said. 

Fisher & Paykel Healthcare, which derives half its revenue in the US, was among the day's leaders, up 2.1 percent at $19.54. Vista Group International rose 1.9 percent to $3.85 with 1.6 million shares traded. Scales Corp was up 1.7 percent at $5.30. 

After trading closed, New Zealand and China struck a deal to upgrade their existing free trade agreement. Announced by Prime Minister Jacinda Ardern and Chinese Premier Li Keqiang at the East Asia Summit in Bangkok, the upgrade would give New Zealand's wood and paper trade preferential access to China, phasing out tariffs on 12 products over a decade.

Fletcher Building led the benchmark index higher, up 2.6 percent to $4.70 with 707,000 shares traded.  

The electricity companies recovered some of their recent losses. The generator-retailers had been under pressure over the past week after Rio Tinto said it was reviewing the status of the Tiwai Point smelter. Meridian Energy increased 1.6 percent to $4.59 on a volume of 1.3 million shares, and Contact Energy was up 0.3 percent at $7.23 with 1.3 million shares traded.

Dual-listed bank stocks were weaker as Westpac Banking Corp reported a 15 percent slide in annual profit and said it planned to raise A$2.5 billion to bolster its balance sheet as trans-Tasman regulators demand higher capital. Its New Zealand unit was one of the stronger performers, with a 1 percent drop in core earnings. The shares were halted at $30 to allow for the capital raising. 

Australia & New Zealand Banking Group, which reported flat earnings from continuing operations last week, declined 1.1 percent to $28 and AMP fell 1.5 percent to $1.97. 

Kiwi Property Group was the most traded stock on a volume of 2.6 million shares. It was unchanged at $1.59. 

Auckland International Airport posted the day's biggest fall, down 1.8 percent at $9.28, with 901,000 shares changing hands. NZX fell 1.6 percent to $1.26 with just 27,000 shares traded. 

Property For Industry was unchanged at $2.39 after it announced a third-quarter dividend of 1.85 cents per share, and said it refinanced its banking facilities with its syndicate. It expanded the facilities by $25 million to $300 million. 

Outside the benchmark index, AFT Pharmaceuticals rose 0.3 percent to $3.02 after it said new accounting standards meant it would book a one-off $9.8 million gain on acquiring full control of the Pascomer topical treatment partnership. 

Evolve Education advanced 1.3 percent to 16.2 cents after it agreed to buy five childcare centres in Queensland and Victoria for A$7.7 million plus potential earn-outs. 


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