New Zealand shares outperformed Asia as companies offering reliable incomes, such as Contact Energy and Meridian Energy, remain attractive in a period of heightened global uncertainty.
The S&P/NZX 50 Index climbed 153.92 points, or 1.4 per cent, to 10,953.92. Within the index, 30 stocks rose, 10 fell and 10 were unchanged. Turnover was $107.6 million.
The local index was one of just five benchmark stock markets tracked by Refinitiv to rise today, with Japan's Topix the next best, up 0.6 per cent in afternoon trading. Wall Street was closed for the Labor Day holiday in the US, leaving investors to focus on the lingering trade war between the US and China and whether the UK and Europe will resolve Brexit.
The Reserve Bank of Australia kept its target cash rate at 1 per cent today, whereas investors still expect New Zealand's central bank to cut the benchmark rate later this year. Low rates are a two-fold boon for equities in that they make dividends more attractive than term deposits or bonds, and they provide cheaper funding for firms to invest.
"We're leading the race today, well and truly. Our friends across the ditch are in negative territory now and we continue to go upwards," said Peter McIntyre, an investment advisor at Craigs Investment Partners.
Meridian led the market higher, up 5.1 per cent to a record $5.33 on a volume of 1.3 million shares, just below its 90-day average of 1.4 million. Contact rose 5 per cent to $9.05 with 1.4 million shares changing hands, Mercury NZ rose 2.9 per cent to $5.36 and Genesis Energy was up 1.5 per cent at $3.50.
Spark New Zealand was the most traded stock on a volume of 2.2 million shares, less than its 3.3 million average. It rose 1.1 per cent to $4.46.
Vista International Group dropped 3.3 per cent to $3.80, the biggest decline for the day. About 1.5 million shares changed hands, more than three times the daily average. The company has been punished since scaling back its growth projections last week, although notices to the stock exchange show executives have been buying shares on market at the lower prices.
"Even though the result was pretty good, the market had priced it to perfection and has continued to sell it off," McIntyre said.
Of other companies trading on volumes of more than a million shares, Fletcher Building rose 2.5 per cent to $4.52, Air New Zealand increased 0.5 per cent to $2.91 and Goodman Property Trust was unchanged at $2.18.
Fonterra Shareholders' Fund units fell 0.6 per cent to $3.30, while A2 Milk rose 2.2 per cent to $14.16 and Synlait Milk was up 0.9 per cent at $9.38.