New Zealand shares rose as markets across Asia rallied on speculation the US Federal Reserve will keep interest rates on hold next year, which would maintain the yield attraction of stocks over bonds. Spark New Zealand was up in heavy trading.
The S&P/NZX 50 index increased 9.1 points, or 0.1 per cent, to 8,767.32. Within the index, 21 stocks rose, 24 fell and five were unchanged. Turnover was $129.3 million, of which Spark contributed $28.1 million
Stocks across Asia were modestly higher in afternoon trading, with Australia's S&P/ASX 200 up 0.4 per cent, Hong Kong's Hang Seng gaining 0.2 per cent and Japan's Topix rising 0.5 per cent.
A report by the Wall Street Journal that the Fed will hike rates this month and then adopt a more cautious approach was welcomed by investors who saw it as a sign that the interest rate track will be flatter than current expectations.
Rising interest rates reduce demand for stocks as investors can lock in a higher return from interest-bearing investments.
Peter McIntyre, an investment adviser at Craigs Investment Partners, said flat interest rates next year should support global growth, which would make it easier for firms to maintain or increase earnings.
"That really pushed the market more towards a client-friendly close and we've seen positive leads right throughout Asia today. New Zealand's part of that," he said.
Spark rose 0.4 per cent to $4.20 on more than twice its average volume at 6.7 million shares traded. McIntyre said Spark is well-liked by international investors because of its attractive dividend yield - almost 6.8 per cent - and liquidity.
Among other stocks held for their dividend, Argosy Property rose 0.9 per cent to $1.16 and Investore Property increased 0.7 per cent to $1.52, both on light volumes.
Chorus was 0.4 per cent higher to $4.77 on very light volumes. The telecommunications network operator's $500m of 10-year bonds started trading today. The notes were heavily oversubscribed, paying annual interest of 4.35 per cent before resetting in five years. Some 1.7 million traded on the first day at a yield of 4.15 per cent.
Z Energy led the market higher, up 2.5 per cent to $5.70 in slightly smaller volumes than average. The transport fuels company welcomed a government inquiry into the failure of the refinery to Auckland fuel pipeline last year, reiterating its concerns about the lack of resilience in Auckland's supply chain. New Zealand Refining fell 0.9 per cent to $2.26.
Meridian Energy fell 1.2 per cent to $3.26, Contact Energy slipped 0.7 per cent to $5.72, and Fletcher Building was down 0.4 per cent at $4.72, all on larger volumes than normal.
Fisher & Paykel Healthcare fell 9 cents to $12.38 after shedding rights to a 9.75 cents per share interim dividend.
A2 Milk rose 2.4 per cent to $11.02 on modest volumes, while Synlait Milk decreased 0.6 per cent to $9.35 in light trading.
Gentrack was the worst performer, down 2.87 per cent at $5.30 and Sky Network Television declined 2.6 per cent to $2.27, both on smaller volumes than usual.
Outside the benchmark index, Hallenstein Glasson dropped 35 cents to $4.85 after shedding rights to a 24 cents per share dividend. Green Cross Health will shed rights to a 3.5 cents per share dividend on Monday, and was down 8 cents at $1.20 today.