Market close: Energy stocks enjoy another good day

Mercury increased 9c to $5.25. Photo / Supplied

Many of the stocks enjoyed handy price gains as investors look for "new" value, but the New Zealand sharemarket was bogged down by the two heavyweights, Fisher and Paykel Healthcare and a2 Milk.

The S&P/NZX 50 Index gained 76.75 points or 0.65 per cent to 11,975.02 after a late surge in prices. More than half of the 181 stocks on the whole market had rises, while 41 declined, and trading increased in the final hour to 52.08 million shares worth $159.17 million.

Fisher and Paykel Healthcare was down 13c to $33.77 on trade worth $18.3m after falling as much as 63c during the day, and a2 Milk was up 4c to $15.48 in the late moves on trade worth $12.9m.

Rickey Ward, head of investment strategy group at JBWere, said people forget that Fisher and Paykel and a2 Milk make up 25 per cent of the market's capitalisation and they drive the direction.

"If they are down or flat, then they drag the market down. But take them away and you find the market has had a pretty good day. The majority of the market is in pretty good shape," he said.

The talk on the market – outside of President Donald Trump's return to the White House and the Dow Jones index's 456 points rise overnight – was Fletcher Building and Air New Zealand, which rose on contrasting news.

Fletcher Building gained 12c or 2.89 per cent to $4.27, having climbed more than a third since mid-August when it sat at $3.30. Ward said Fletcher continues to get support on strong housing data.

"Fletcher's initial forecast of a contraction in the residential market may be conservative or cynical, and there is ongoing rotation back into value stocks. Fletcher is one of them," he said.

Air New Zealand, half owned by the Government, announced its chief financial officer Jeff McDowall is leaving the company in the middle of next year after more than 20 years. The airline's share price climbed 5.5c or 3.65 per cent to $1.56.

Ward said it looks like McDowall has resigned out of frustration. "Air New Zealand needs to resolve its capital situation and they've said they'll do a capital raising in the first part of next year.

"Instead of raising money, they've gained access to a Government loan with punitive interest at 7-8 per cent. Other companies have gone out and raised money without having clear visibility on the outlook.

"It suggests that Air New Zealand is driven by political decisions rather than what is prudent for all shareholders. Why the share price went up, I really don't understand," Ward said.

Amongst the gainers were Ebos, up 33c to $24.33; Freightways, gaining 13c to $8.17; Pushpay Holdings, increasing 15c to $8.72; Synlait Milk up 10c to $5.62; Chorus, up 23c or 2.71 per cent to $8.72; and Serko picking up another 14c or 3 per cent to $4.81.

The energy stocks enjoyed another good day – Contact climbing 13c to $7.20, Meridian gaining 13.5c or 2.75 per cent to $5.04, and Mercury increasing 9c to $5.25.

NZME continued its re-rating – climbing 5c or 8.62 per cent to 63c and gaining more than 16 per cent in two days. Sky Network Television was up 5c or 3.45 per cent to 15c following news that it is looking at providing subscribers with more flexible viewing packages.

Among the decliners, wine company Delegat Group was down 19c to $14.65; and Marsden Maritime Holdings, owner of Northport near Whangarei, lost 9c to $5.80.

Overnight, Wall Street rebounded with the Dow Jones climbing 465.83 points or 1.68 per cent to 28,148.64, the S&P 500 Index increased 1.8 per cent to 3408.60, and the Nasdaq Composite had the biggest gain, up 2.32 per cent to 11,332.49.