MARKET CLOSE: NZ stocks tick higher as offshore moves lift sentiment

Tuesday 6th November 2018

New Zealand shares ticked up, supported by overnight gains on Wall Street and positive trading in Australia. A2 Milk Co and Synlait Milk rose.

The S&P/NZX 50 index rose 37.64 points, or 0.4 percent, to 8,816.42. Within the index, 27 stocks rose, seven were unchanged and 16 fell. Turnover was $130.9 million.

Sentiment got a lift when the Dow Jones Industrial Average rose 0.8 percent and the S&P 500 lifted 0.6 percent on gains in the broader financial sector. Australia's S&P/ASX 200 index was up 0.9 percent after the Reserve Bank of Australian kept rates on hold at a record 1.5 percent.

"It's been a positive day in reaction to offshore firmness in the markets. We are really following them and we are just clawing back our losses from October," said Grant Williamson, a director at Hamilton Hindin Greene.

A2 Milk lifted 3.5 percent to $10.50 after falling in recent sessions. Williamson said the lift wasn't driven by any specific news but by buying interest at these levels.

There seems to be a "pretty significant turnaround" with November seeing buyers come back into the market place, he said.

Synlait rose 2.9 percent to $8.76. Other companies to garner buying interest included Spark New Zealand, the shares of which rose 2.3 percent to $4.07. Kathmandu Holdings added 3.2 percent at $2.90.

Orion Health Group was up 1.8 percent to $1.16. Yesterday, the technology company raised the likely price range for its planned buyback to $1.20 to $1.25 from $1.16 to $1.26, following the completion of the sale of its Rhapsody unit to UK private equity firm Hg for $205 million.

Contact Energy added 0.9 percent to $5.65. Earlier the company said its operating earnings during the past four months are ahead of last year. It generated 3,158 GWh of electricity in the four months through October, about 8 percent more than the year before. Average prices for that output were 55 percent higher at $133.42 per megawatt hour.

Genesis Energy added 0.2 percent to $2.41. Mercury NZ dipped 0.7 percent to $3.405 and Meridian Energy fell 1.4 percent to $3.115.

Williamson said gains were pretty much across the board with the exception of a handful of stocks.

Ryman Healthcare fell 3.3 percent to $12.20 but he said there was no specific driver behind the move. "It's just a few sellers came back in," he said. The same was true for SkyCity Entertainment, which fell 3.4 percent to $3.72.

Z Energy bounced slightly after sharp falls since it rattled investors last Thursday with a 21 percent drop in first-half earnings and a dividend about five cents less than they were expecting. The stock added 1.9 percent to $5.28.

While investors will be keeping one eye on domestic news, such as labour data tomorrow and the central bank's monetary policy statement Thursday, Williamson said the main focus is offshore.

US congressional midterm elections are of particular interest but tough to call, he said. Results are due Wednesday in New Zealand The Democratic Party may win back control of the House of Representatives with the Republicans likely to keep the Senate.

If that's the case, it may not be viewed as positive for markets at it will make progress on policy more difficult, he said.

(BusinessDesk)

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