New Zealand shares gained, led by Tegel Group Holdings, Sky Network Television, while Air New Zealand dropped back amidst analyst downgrades.

The S&P/NZX50 Index rose 22.4 points, or 0.3 per cent, to 7,113.32. Within the index, 27 stocks rose, 11 fell and 12 were unchanged. Turnover was $105 million.

Tegel led the index, up 3 per cent to $1.38, after gaining 3.1 per cent yesterday.

The shares hit a record low of $1.29 in mid-December after the company said it would miss its forecast earnings as a glut of chicken keeps a lid on domestic prices and rising freight costs squeezes margins. Shares recovered as 2016 ended, but weakened again in January. The poultry firm listed on the NZX in May 2016 at $1.55.

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"It's been sold off fairly heavily all year, yesterday may have been only the second or third day the stock had gone up - it's been on a bit of a continuous slide, so some people may be seeing a bit of value there,"said Robert Garden, investment adviser at Craigs Investment Partners.

"The competitive space in the sector is pretty tight at the moment. It's still early days as a listed company, the way the stock's moved they're going to need to get more runs on the board before faith comes back for investors."

Sky Network Television rose 1.8 per cent to $4.62, Restaurant Brands New Zealand gained 1.5 per cent to $5.47, and Spark New Zealand advanced 1.4 per cent to $3.535.

This morning, Statistics New Zealand said the consumers price index rose 0.4 per cent in the three months ended December 31 for an annual pace of 1.3 per cent, the fastest annual pace since June 2014 and the first time headline inflation has been within the Reserve Bank's target band of 1-to-3 per cent in two years.

Economists had been picking quarterly inflation of 0.2 per cent for an annual pace of 1.2 per cent.

"There's probably a bit of volatility to come with where interest rates are headed, given our weighting to yield stocks on our market that's where all eyes will be," Garden said.

"The inflation numbers out today were marginally ahead of most expectations, we'll look forward to the next Reserve Bank announcement. We've seen a bit of recovery in some of the names that have been sold off, some of the yield stocks sold off prior to Christmas are making a bit of a comeback, so I think the focus will be in that area."

Air New Zealand was the worst performer, down 3.6 per cent to $2.12.

Yesterday, the airline said passenger revenue in the first six months of the company's financial year has fallen sharply, even when the impact of foreign exchange fluctuations are eliminated.

Short haul passenger revenue through its preferred metric fell 6.3 per cent in the six months to December, while long-haul passenger revenue slumped 14.3 per cent.

Analysts at Craigs Investment Partners have downgraded the share price target for Air New Zealand to $2.09 from $2.17 and warned its earnings before tax is likely to come in at the lower end of expectations. The shares have dropped by around a fifth since this time a year ago.

Vector dropped 2.1 per cent to $3.20 while Investore Property declined 1.4 per cent to $1.38.

Comvita dropped back 1.4 per cent to $7.20. The manuka honey products maker's shares led the index yesterday, recovering after plunging 17 per cent from $7.83 on Monday when it warned annual earnings will tumble by about two-thirds as the nation's unseasonably wet and windy weather saps the honey harvest and slow sales via China's informal trading channels, but bounced 7.5 per cent yesterday.