Sky TV led the market higher, rising 3.6 per cent to $2.28. Photo / File
New Zealand shares rose as investors weigh up the prospect of a potential rate cut, spurring demand for stocks with high dividends, in a world economy that remains relatively robust. Sky Network Television, Spark New Zealand and Chorus gained.
The S&P/NZX 50 index gained 34.86 points, or 0.4 per cent, to 9,292.15. Within the index, 32 stocks gained, 14 fell and four were unchanged. Turnover was $124.4 million.
Traders are pricing in a 50 per cent chance New Zealand's Reserve Bank will cut the official cash rate in an effort to lift inflation.
Low interest rates have been a long-standing support for the domestic market, where investors can find relatively stable returns from the likes of utilities and property investment firms.
arnings season affirmed the relatively benign outlook for local companies, while the global economy remains well supported by rapid growth in the US, notwithstanding geopolitical ructions.
"We've got potential for a rate cut" with the global economy in "pretty reasonable shape" which is "buoying the market," said Grant Davies, an investment adviser at Hamilton Hindin Greene in Christchurch.
"We find ourselves in this situation where people are expecting the worst is about to happen because it's been so long since things have gone wrong."
Sky TV led the market higher, rising 3.6 per cent to $2.28, as it bounced back for a second day after a 19 percent decline through the tail-end of August.
Spark rose 1.8 per cent to $4.01 after Vodafone New Zealand reported a decline in annual earnings as its margins were squeezed by an increasingly competitive broadband market. Network operator Chorus, which counts both Spark and Vodafone as major customers, rose 1.6 per cent to $4.72.
Mercury NZ rose 1.5 per cent after its joint venture with Infratil was granted approval by Australia's Foreign Investment Review Board to buy Tilt Renewables. Infratil increased 0.3 per cent to $3.425. Tilt's independent directors urged investors to reject the $2.30 takeover, saying the price was too low. Tilt shares increased 0.9 per cent to $2.30.
Davies said Infratil and Mercury already own about 77 per cent so don't need much to trigger compulsory acquisition under the Takeovers Code.
Contact Energy rose 0.5 per cent to $5.58 after appointing Westfield Milk Products' Dorian Devers as its new chief financial officer.
Kathmandu Holdings fell 1.5 per cent to $3.20, the biggest fall on the day. The retailer is scheduled to report annual earnings on September 18.
Westpac Banking Group fell 0.9 per cent to $30.82 after saying it reached a A$35 million ($38.3m) deal with the Australian Securities and Investments Commission, settling potential litigation over automatically approving 10,500 loans between 2011 and 2015 that should have been referred to a credit officer. Australia & New Zealand Banking Group declined 1.3 per cent to $31.38.
Outside the benchmark index, Methven gained 6.3 per cent to $$1.18. The tapware maker attracted a new investor who paid $1.20 a share for a 6.4 per cent stake.
Pyne Gould Corp fell 1.5 per cent to 34 cents after appointing Grant Thornton Guernsey as its new auditor to meet Guernsey law. Grant Thornton NZ will provide a separate audit to ensure the firm meets New Zealand laws and NZX listing rules.