MARKET CLOSE: NZ share rise ahead of Fed; Trade Me, Orion, Fletcher gain

Thursday 17th September 2015

New Zealand shares rose ahead of the US Federal Reserve's impending interest rate announcement, which will set the tone for global markets. Trade Me Group, Orion Health Group and Fletcher Building gained.

The S&P/NZX 50 rose 26.26 points, or 0.5 percent, to 56694.23. Within the index, 27 stocks rose, 14 fell and nine were unchanged. Turnover was $109 million.

Markets across Asia rose, with Australia's S&P/ASX 200 Index up 1.3 percent in afternoon trading and Japan's Nikkei 225 Index gaining 1.4 percent. The outlook for global equity markets is mixed, with investors, analysts and economists divided about whether the US Federal Reserve will lift rates for the first time in a decade. Markets are buoyed by signs of growth in the world's largest economy, but a raise in rates may see investors move their investments from equities to less riskier assets.

"There's a little bit of confidence returning," said Grant Williamson, director at Hamilton Hindin Greene. "We've got the Fed in the states announcing tonight. There are some expectations of an interest rate rise but I think they are diminishing somewhat. I think there is only about a 30 percent chance that the Feds will raise interest rates. If they don't that will give a bit more confidence to these markets."

Dual-listed stocks led the benchmark index higher. Trade Me, the online auction site, was the best performer on the day up 4.2 percent to $3.74. Orion Health, the healthcare management software service, gained 2.5 percent to $3.28. Fletcher, the construction and building supplies firm, advanced 2.3 percent to $7.43. Australia and New Zealand Banking Group increased 2.2 percent to $32.03. Westpac Banking Corp rose 2.3 percent to $35.59.

Weaker than expected gross domestic product figures knocked the currency nearly half a cent lower in morning trading. A weaker kiwi dollar is good for listed exporters, who earn their income offshore, Williamson said. Fisher & Paykel Healthcare, which earns 99 percent of its revenue offshore, advanced 1.6 percent to $7.77.

"Our currency was knocked early on with disappointing GDP figures out in New Zealand, they didn't miss the mark by much but they did miss expectation just slightly and that's put a little bit of downwards pressure on the New Zealand dollar, " Williamson said.

Kathmandu Holdings, the outdoor goods retailer, was the worst performer on the benchmark index down 2.6 percent to $1.53.

Pacific Edge, the biotech firm, fell 2 percent to 49 cents. Infratil, the infrastructure investor, declined 1.6 percent to $3.

BusinessDesk.co.nz

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