New Zealand shares rallied, with more volume through politically-driven sectors as the September election draws closer.

A2 Milk Co rallied to another record, while Xero gave back some gains.

The S&P/NZX 50 Index rose 25.45 points, or 0.3 per cent, to 7,771.57. Within the index, 27 stocks rose, 14 fell and nine were unchanged. Turnover was $160 million.

Jacinda Ardern has taken over the leadership of the Labour Party from Andrew Little, and the positive reaction to her ascent has been dubbed the 'Jacinda Effect', with the Labour Party reporting an upsurge in volunteers and donations while international media have covered Ardern's response to sexist questioning.


"Everyone's just positioning themselves for the results, you've seen reasonable volumes in the leaders again - perhaps I'm drawing a long bow, but it could be the 'Jacinda Effect'," said Rickey Ward, at JBWere.

"Markets are potentially looking at some sectors - carbon, construction, electricity. A week or so ago, people were dismissing a potential change in government, and perhaps that's changed with Jacinda. It has focused people back on some of the potential policy they might campaign on," Ward said.

"Fletcher Building is recovering from Friday's sell-off, that's infrastructure spend, and there's good volume going through the electricity sector -- all those sorts of things which seem to be big on the agenda for the left," Ward said. "There does seem to be reasonable volume going through these names in what is a quiet day."

Fletcher Building gained 0.9 per cent to $7.95, while Metro Performance Glass gained 0.7 per cent to $1.44. Chorus gained 0.5 per cent to $4.48, while Contact Energy dropped 0.6 per cent to $5.34 and Genesis Energy fell 0.4 per cent to $2.43.

A2 Milk was the best performer, up 3 per cent to $4.80, its second consecutive record. On Friday, the milk marketer released a statement, in conjunction with Synlait Milk, saying the two were confident with the progress of their application to export a2 Platinum infant formula to China from January 2018. Sales of the formula currently comprise about 8 per cent of A2's total infant formula sales.

"It just keeps breaking new highs, a lot of analysts upgraded their numbers over the last month. It's a stand-out story, no doubt about it," Ward said. "Most analysts have come out believing they can extend their Chinese success to other parts of the world, there's a lot of support for it."

Xero was the worst performer, down 1.2 per cent to $27.02. The stock has gained 56 per cent this year amidst positive earnings, but has fallen back over the past two sessions after reaching a three-year high on Friday.

"You can always find cynics when they rally high, naturally people take a bit of a breather and this is nothing more than that, I suspect," Ward said.


Spark New Zealand dropped 0.8 per cent to $3.84 and Z Energy fell 0.8 per cent to $7.83.