Market close: NZX has strong rise as a2 Milk fires into action

The a2 Milk Company rose 49c or 2.68 per cent to $18.79. Photo / File

Strong showings in the United States and Australian indices buoyed the New Zealand sharemarket, with a recovering a2 Milk providing the backbone.

The S&P/NZX 50 Index had its second successful strong rise, climbing 152.06 points or 1.28 per cent to 12,055.05 on 72.5 million trades worth $252.5 million. There were 95 gainers and 43 decliners over the whole market.

The a2 Milk Company fired into action, rising 49c or 2.68 per cent to $18.79 on trade worth $30.6m. Over the past fortnight it had fallen from $21.50 to $18.30. Fisher and Paykel Healthcare was up 6c to $36.21 on trade worth $48m.

David Price, Forsyth Barr's director international equities, said a2 Milk had been dragging the market down, and now its lifting it back up. The offshore markets including Australia had a better day and the dual-listed stocks such as a2 Milk have benefitted.

The S&P 500 and Nasdaq indices scaled new heights in the United States overnight and at 5.30pm the Australian S&P/ASX 200 Index was up 47.4 points or 0.78 per cent to 6110.6, with dual-listed SkyCity leading the way.

Price said "investors are now playing the recovery stocks and opening up trades in sectors like tourism and leisure as hospitalisation rates come down in the United States."

Auckland International Airport was up 26c or 3.86 per cent to $7.00, cinema software company Vista Group increased 9c or 4.86 per cent to $1.94, and online travel provider Serko increased 15c or 4 per cent to $3.90. Cinema operator AMC Entertainment said it was opening up a further 140 movie theatres in the US this week, taking its total operating to 420.

SkyCity was the day's biggest mover, rising 17c or 6.8 per cent to $2.67 on trade worth $3.3m after producing a better-than-expected full year result. SkyCity reported a near 60 per cent drop in net profit to $66.3m from $164.6m on revenue of $779m, down 24.3 per cent from $1.029 billion. It is not paying a final dividend or an interim in the 2021 financial year, but is expecting to resume payment in September/October next year.

Price said SkyCity is trading stronger than people expected and they are not alone in not paying a dividend. "You can't pay a dividend when you've had a capital raising."

Other strong movers were Ryman Healthcare, up 16c, to $14.00; Briscoe Group gained 14c or 3.85 per cent to $3.78; Mercury Energy increased 23c or 4.54 per cent to $5.30; Trustpower rose 18c or 2.6 per cent to $7.11; Sanford climbed 14c or 2.46 per cent to $5.84; and Fletcher Building continued its run, up 8c to $3.65.

Pushpay, which has seen former directors selling shares, was down 18c to $8.07; and Delegat Group stuttered, falling 44c or 2.95 per cent to $14.50.

In the United States overnight, the Dow Jones Industrial Index surged 454.84 points or 1.59 per cent to 29,100.50, and the S&P 500 and Nasdaq indices reached new all-time highs, the S&P finishing at 3580.84, up 1.54 per cent, and Nasdaq up 0.98 per cent to 12,056.44.

The rally was led by sectors that have underperformed this year, including utilities and financial services, and investors were banking on a further government economic stimulus.

The increase in investor interest on the local sharemarket was shown in NZX's latest monthly statistics. Total trades in August were up 112 per cent compared with the same month last year and the total value increased 15.3 per cent.