Xero leads rise in local stockmarket

Xero, led by chief executive Rod Drury, was the best performer today, up 2.9 per cent at $26.02. Photo / Jason Oxenham

New Zealand shares rose, led by Xero which was spurred on by a rally in tech stocks on Wall Street, while blue chip stocks including power company Contact Energy and dual-listed Westpac Banking Corp also gained.

The S&P/NZX 50 Index gained 36.58 points, or 0.5 per cent, to 7563.69. Within the index, 31 stocks rose, 15 fell and four were unchanged. Turnover was $150 million.

Wall Street's tech-heavy Nasdaq Composite rose 0.7 per cent in New York, boosting demand for local accounting software developer Xero, which was the best performer today, up 2.9 per cent to $26.02.

That was just shy of the three-year high of $26.25 the stock reached earlier this month, and added to a 45 per cent gain this year, bolstered in mid-May when the firm said it was moving closer to its first-ever profit as customer numbers continue to swell.

"The tech sector in the US did a little better so Xero has followed that lead and tracked higher. It's had a reasonable few months of performance," said James Lindsay, senior portfolio manager at Nikko Asset Management.

"I suppose the transition to people understanding that cashflow breakeven and earnings are getting closer, it was up 15 per cent last month and it's added another dollar or so since then."

Contact rose 2.3 per cent to $5.29, Westpac gained 1.6 per cent to $31.70, and Spark New Zealand advanced 1.6 per cent to $3.80.

"There have been some relatively interesting moves, driven by offshore market moves - we've had, on very little announced news, some quite strong returns," Lindsay said.

"A few of the names in the leaders have been related to yield stocks. We've had Contact, Westpac and Spark strongly bid, but on the news front it's relatively benign."

SkyCity was the worst performer, dropping 1.8 per cent to $4.27, while Vista Group International fell 1.3 per cent to $5.92 and Z Energy dropped 1.3 per cent to $7.45.

Fonterra Shareholder's Fund gained 0.2 per cent to $5.95. Fonterra Co-operative Group expects to collect 3 per cent more milk from New Zealand farms this season as higher milk prices encourage farmers to lift production.

Property For Industry was unchanged at $1.64. The industrial property investor's managers will reap a $42m payday after shareholders voted to internalise its management contract.

At the company's annual meeting in Auckland today, 94.4 per cent of votes cast were in favour of the motion to internalise. Management rights have been owned by PFIM Ltd since about 1994, with PFIM subcontracting its management role for Property for Industry.

Outside the benchmark index, Seeka was unchanged at $5.10. The largest kiwifruit grower in New Zealand and Australia has confirmed its guidance for a 15 per cent drop in operating profit in 2017 as weaker-than-expected kiwifruit crops offset growth from its avocado sector.

The company warned 2017 operating profit may be up to 15 per cent lower than the record $7.8m in 2016, with New Zealand Hayward kiwifruit volumes forecast to be between 20 and 25 per cent lower than the previous year.

NZME shares rose 2.4 per cent to 84c after the media group told shareholders at today's annual meeting that a High Court appeal against the Commerce Commission's opposition to a planned merger with rival Fairfax NZ will be heard in October.