MARKET CLOSE: NZ shares rise with global markets; Xero, A2, Nuplex gain while Spark falls

Monday 25th January 2016

New Zealand shares rose as global markets rallied after a bounce in oil prices, with investors' search for growth pushing Xero, A2 Milk Co and Nuplex up while Spark New Zealand fell.

The S&P/NZX 50 Index climbed 53.64 points, or 0.9 percent, to 6175.3. Within the index, 36 stocks rose, nine fell and five were unchanged. Turnover was $99.7 million.

"We are having a bit of a rally, consistent with other markets, and driven by higher growth businesses like A2 and Xero," said Shane Solly, director at Harbour Asset Management. "People are looking for businesses which have got some growth in a period where growth's hard to come by."

Xero, the cloud-based accounting software developer, led the market, up 5.3 percent to $17.40, while A2 Milk rose 5.1 percent to $1.85, a three-week high. A2 hit an all-time high of $2.27 on Dec. 29 as Chinese demand for infant formula pulled institutional investors in, but has shed those gains as worries about China's economy persist in light of weaker economic data.

"A2 rallied higher pre-Christmas and came back a little, as the rest of the market has over the New Years period. It's just starting to find some renewed interest again," Solly said.

Blue-chip stock Fletcher Building gained 3 percent to $6.98, and Nuplex, whose resins are used in industrial coatings and paint, advanced 2.4 percent to $4.35.

Markets across Asia rose this afternoon after a positive close to Wall Street following a bounce in oil prices. Hong Kong's Hang Seng index advanced 1.9 percent, Japan's Nikkei gained 0.8 percent, and Australia's S&P/ASX 200 reached a ten-day high, up 1.5 percent at 5.15pm New Zealand time.

"The oil price has bounced off low points but it has the potential to remain pretty volatile, and certainly that's still high in people's minds in terms of what that means for broader capital markets," Solly said. Markets have been disrupted by holidays and will remain that way with Chinese New Year approaching, he said.

Dual-listed Australian banks advanced with the ASX up. Australia & New Zealand Banking Group gained 3.6 percent to $25.90, while Westpac Banking Corp rose 3.2 percent to $33.02.

Trade Me Group, which earlier reached an intra-day low of $4.05, ended the day up 2.2 percent to $4.26.

Orion Health Group rose 2 percent to $3.06. The healthcare software company today announced two contracts in the French healthcare system, without disclosing their value.

Spark New Zealand was the worst performer on the index today, down 2.1 percent to $3.27.

Steel & Tube Holdings, New Zealand's biggest steel distribution company, fell 1.8 percent to $2.21. Meridian Energy dropped 1.1 percent to $2.325, and Fonterra Shareholders Fund shed 0.7 percent to $5.85.

BusinessDesk.co.nz

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