World rally warms up Kiwi market as Fletcher rebounds

The S&P/NZX 50 index gained 49.07 points, or 0.7 per cent, to 7499.97.

New Zealand shares rose today, led by Fletcher Building and Restaurant Brands, as global equity markets rallied.

The S&P/NZX 50 index gained 49.07 points, or 0.7 per cent, to 7499.97. Within the index, 35 stocks rose, nine fell and six were unchanged. Turnover was $167 million.

The local index followed global bourses higher, after US markets finished stronger after upbeat manufacturing and employment data. Today afternoon, Japan's Nikkei 225 rose 1.9 per cent, Australia's S&P/ASX200 gained 0.7 per cent and Hong Kong's Hang Seng advanced 0.5 per cent.

Fletcher Building was the best performer on the local index, up 3.5 per cent to $7.73. The shares have been weak, dropping nearly a dollar over May to $7.56, said Craig Stent, executive director and head of equities at Harbour Asset Management.

"There have been expectations they might have further downgrades to earnings, though those could have been priced in now," Stent said. "It's possible people have become a little over-bearish in that regard."

Restaurant Brands gained 2 per cent to $6.07, a record, after the fast-food operator announced it had boosted first-quarter sales by 67 per cent to $161.2 million after expanding in Australia, Hawaii, Guam and Saipan. On a same-store basis, sales rose 7.2 per cent.

"The key driver of that is probably KFC sales. There's a bit of expectation that they will acquire further stores in Australia," Stent said. "It's likely those might come from Yum Brands as the master franchisor."

Air New Zealand was the worst performer, down 4 per cent to $2.90. On Thursday, the shares hit a 16-year high of $3.02 after the airline lifted its full-year guidance to exceed $525 million, having benefited from lower jet-fuel prices and improving revenue. Today, First NZ Capital lifted its 12-month target price on Air New Zealand to $2.50 from $2.10 but lowered its rating to "underperform" from "neutral".

Sky Network Television dropped 1.4 per cent to $3.63, while Spark New Zealand declined 1.3 per cent to $3.78.

NZX shares were unchanged at $1.09.

The stock exchange operator's board told shareholders it did not support the election of Tony Falkenstein as one of its directors at its annual meeting later this month, saying he would not add sufficient additional skills, depth or experience.