NZ shares rise in line with global rally

Air New Zealand shares rose 2.2 per cent yesterday to close at $2.605.

Air New Zealand takes flight thanks to cheaper jet fuel and property trusts continue their solid performance

New Zealand shares rose yesterday, led by Argosy Property, as global stocks rallied on upbeat US employment data and the prospect Europe's central bank will have to print money to revive its flagging economy. Air New Zealand gained as falling oil prices translated into cheaper jet fuel.

The NZX 50 Index advanced 15.995 points, or 0.3 per cent, to 5574.052. Within the index, 28 stocks rose, 14 fell and eight were unchanged. Turnover was $89 million.

Stock markets across Asia followed Wall St higher, with Japan's Nikkei 225 Index up 2 per cent in afternoon trading, Hong Kong's Hang Seng up 0.5 per cent, and Australia's S&P/ASX 200 index up 0.4 per cent. Equity markets got a boost from better-than-expected United States job figures, while deflation across the eurozone stoked expectations the European Central Bank will embark on a quantitative easing programme, which would flow through to stock markets.

"We're following the overnight lead, that's the key thing - it's a bit of a relief rally," said Andrew Bascand, managing director Harbour Asset Management.

"There was some better German employment data, there were some more market-friendly comments out of Europe in terms of policy, and there was some good US data as well."

Falling oil prices are expected to remove inflationary pressures that may have prompted central banks to raise interest rates more aggressively, and encouraged investors to seek dividend-paying stocks.

Property trusts, held for their reliable income, rose. Argosy Property climbed 2.3 per cent to $1.135. DNZ Property Fund gained 1 per cent to $1.95. Property For Industry rose 1 per cent to $1.555. Kiwi Property Group advanced 0.8 per cent to $1.28. Vital Healthcare Property Trust climbed 1.9 per cent to $1.63.

Air New Zealand climbed 2.2 per cent to $2.605. The national carrier flagged last year that falling oil prices were translating to cheaper jet fuel, a significant input cost for the airline.

Kathmandu Holdings was the day's worst performer, dropping 3.5 per cent to $1.95. The outdoor goods retailer flagged weak sales in the lead-up to Christmas.

"Kathmandu gave us a pre-Christmas warning," Bascand said. "Now we're waiting for Kathmandu to tell us how they went over the Christmas break."

Warehouse Group, New Zealand's largest listed retailer, slipped 0.7 per cent to $2.89, continuing Wednesday's decline after it slashed first-half earnings guidance, blaming a cold, wet spring and summer for poor seasonal sales.

Across the Tasman, building consents rose to a record high for any month, which boosted construction companies on the local sharemarket, Bascand said. Fletcher Building, the construction and building supplies company, gained 0.4 per cent to $8.12. Steel & Tube Holdings, the steel products manufacturer, rose 1.1 per cent to $2.86.

Diligent Board Member Services rose 2.1 per cent to $5.36. Trade Me Group gained 2 per cent to $3.62.

NZX was unchanged at $1.16 after the stock market operator's monthly shareholder metrics showed December trading volumes and values fell from a year earlier.