Index up on hunt for yield

F&P Healthcare gained 2.1 per cent to $9.87.

Overseas investors tipped to target large cap stocks.

New Zealand shares rose as offshore investors looking for yield were lured to the local bourse. Fisher & Paykel Healthcare and Auckland International Airport led the index higher while Steel & Tube Holdings fell.

The S&P/NZX 50 Index rose 24.36 points, or 0.3 per cent, to 7423.19. Within the index, 24 stocks fell, 22 rose and five were unchanged. Turnover was $170.7 million.

"There's flow-driven movement from offshore - the desire to hide, invest, call it what you will, in New Zealand continues unabated," said Matt Goodson, managing director at Salt Funds Management.

"It's always interesting when you see this growth from offshore investors, it tends to be the large cap stocks. We've just finished results season so it's very light on the ground for stock-specific news, we're really just driven by offshore flows. Our market's certainly at reasonably stretched levels of valuation."

F&P Healthcare gained 2.1 per cent to $9.87 and Auckland International Airport rose 2 per cent to $7.65.

Property stocks rose, with Kiwi Property Group up 1.9 per cent to $1.58, Goodman Property Trust gaining 1.5 per cent to $1.37, and Stride Property advancing 1 per cent to $2.07.

"We have seen bonds sell off over the last couple of weeks, as the market has begun to move to the view that the Federal Reserve is more likely than not to tighten in September," Goodson said. "Property stocks around the world have been under a little bit of pressure by and large, certainly in Australia, so they seem to have been oblivious to that in New Zealand thus far."

Steel & Tube was the worst performer, down 5.1 per cent to $2.22. It's dropped 8.6 per cent this week.

Metro Performance Glass fell 3.4 per cent to $2.02, Chorus dropped 2.4 per cent to $4.15, and Warehouse Group fell 2.1 per cent to $2.83.

SkyCity Entertainment Group, which gave up rights to a 10.5c dividend, dropped 11c to $4.90 while NZX, which paid a 3c dividend, fell 2c to $1.02.

Outside the main index, Turners was unchanged at $3.05.

It extended its contract with Custom Fleet for a further three years to manage the sale of former lease vehicles of New Zealand's largest vehicle and equipment leasing company.

The agreement extends an existing three-year partnership which covers some 4000 vehicles a year, Auckland-based Turners said. It didn't provide a value for the deal.