WELLINGTON: New Zealand shares rose, snapping a six-session streak of declines, led by New Zealand Refining Co, Xero and SkyCity Entertainment Group. The S&P/NZX 50 Index gained 54.28 points, or 0.8 percent, to 7,250.52. Within the index, 32 stocks rose, 12 fell and six were unchanged. Turnover was $170.3 million.
The local index is down 2.9 percent this week, starting the week on a sour note when it fell more than it did after the Brexit vote as investors dumped stocks on Wall Street on growing expectations the Federal Reserve would resume hiking interest rates.
“We’re just having a bit of a bounce after the weakness we’ve experienced this week,” Grant Williamson, director at Hamilton Hindin Greene, said. “It’s probably been one of the worst weeks we’ve experienced in quite some time, it’s a pretty big move down for the local market after having such a good period. “We’re starting to see investors pay more attention to overseas markets, particularly the US, and the talk of the Fed doing something with interest rates before the end of the year – I think investors are going to keep a pretty close eye on that scenario for the next wee while.”
Global interest rates near zero and quantitative easing programmes have attracted investors to New Zealand stocks, which pay relatively high dividends on blue-chip stocks. If US interest rates start rising the yield of NZX-listed firms would start to lose its allure, and investors are watching for signs on when the Fed might move. The US central bank’s next policy review is Sept. 20-21 in Washington.
Williamson said today’s bounce could also be from money paid to investors from the Nuplex Industries acquisition by Allnex Belgium SA being recycled into other companies. “We’ve probably only seen a fraction of it come into the market so far, so over the next few weeks we might see some pretty good buy-in in some of our stocks.”
