Mighty River Power rose 0.4 per cent to $2.83. Photo / Alan Gibson
Mighty River Power rose 0.4 per cent to $2.83. Photo / Alan Gibson
Income-paying stocks in demand.
New Zealand shares rose, buoyed by the prospect of lower interest rates making returns on equities more attractive. Income-paying stocks, such as Contact Energy and Sky Network Television, advanced.
The S&P/NZX 50 index gained 18.19 points, or 0.3 per cent, to 5824.15. Within the index, 25 stocks rose, 17 felland eight were unchanged. Turnover was $131 million.
Overnight prices for whole milk powder, the country's key commodity export, dropped more than expected in the GlobalDairyTrade auction, sending the kiwi dollar to a six-year low. On the back of that weakness, traders expect the Reserve Bank will lower the official cash rate next week, and have priced in 56 basis points of cuts over the coming 12 months, according to the Overnight Index Swap curve. Contact, the energy retailer and generator, advanced 1.8 per cent to $5.15. Sky TV, the country's dominant pay-TV provider, rose 1.2 per cent to $6.16. Spark gained 0.5 per cent to $2.88.
Mighty River Power, the state-controlled energy provider, rose 0.4 per cent to $2.83. Chorus, the network operator, increased 0.5 per cent to $2.825.
Fletcher Building, the construction and building supplies firm with significant Australian interests, climbed 2 per cent to $8.28. Fisher & Paykel Healthcare, the breathing apparatus manufacturer and exporter, rose 0.1 per cent to $7.18.
The decline in dairy prices weighed on the few listed dairy companies on the local bourse. A2 Milk Co, the milk marketing company, was unchanged at 77c. Synlait Milk, the South Island milk processor, dropped 1.2 per cent to $2.52. Units in Fonterra Shareholders' Fund, which give holders access to Fonterra Co-operative Group's dividend stream, declined 1.5 per cent to $4.70.
Outside the benchmark index, rural supplies company PGG Wrightson fell 2.1 per cent to 46c.
Cavalier was the biggest gainer on the S&P NZX All Index, climbing 20 per cent to 54c, on the back of investor optimism that changes in the governance of the carpet maker may be able to turn around its poor performance.
Gentrack Group, which develops utilities and airports software, climbed 7.1 per cent to $2.25 after it completed one of two negotiations weighing on its forecasts with a UK water utility firm entering into a contract.
