WELLINGTON: New Zealand shares have joined in a global rally as investors shrugged off worries about China. Spark New Zealand, Summerset Holdings and Fletcher Building advanced as Thursday’s likely rate cut by the Reserve Bank of New Zealand saw traders buy dividend-paying stocks.
The S&P/NZX 50 Index advanced 61.12 points, or 1.1 percent, to 5671.43 today. Within the index, 30 stocks rose, 14 fell and six were unchanged. Turnover was strong at $199 million.
Overnight markets on both sides of the Atlantic moved higher, triggered in part by a late surge in Chinese equities, amid optimism China’s government will act to support its flagging economy. Asian markets followed suit, with Japan’s Nikkei 225 index surging 5.8 percent in afternoon trading.
Xero climbed 2.4 percent to $14.20, as a “risk on” attitude boosted the stock higher. Fellow momentum stock, Pacific Edge, the biotech firm, climbed 3.2 percent to 48 cents, rebounding from a two-year low. “There were very positive leads from overseas and that’s followed on and carrying on today,” said James Smalley, director at Hamilton Hindin Greene.
“It’s a risk on day for the market and certainly does appear there is a bit of institutional buying with the volumes up.” Spark climbed 0.6 percent to $3.36, Fletcher Building 3.5 percent to $7.17, Summerset 3.5 percent to $3.88 and Contact Energy 1.4 percent to $5.09.
“We will be looking at falling interest rates and with our very high income paying market, that will be attractive to domestic investors,” Mr Smalley said. Air New Zealand was the worst performer on the benchmark index, dropping 4.7 percent to $2.41.
