New Zealand shares joined a rally across Asia as investors remained confident that US and China will end their protracted trade war. Fletcher Building led the market higher as the stock continued its recovery this month.
The S&P/NZX 50 Index increased 39.99 points, or 0.4 per cent, to 10,841.54. Within the index, 27 stocks rose, 16 fell, and seven were unchanged. Turnover was $123.7 million.
International equity markets were broadly stronger, with Hong Kong's Hang Seng up 0.5 per cent in afternoon trading, Australia's S&P/ASX 200 Index rose 0.2 per cent, and Singapore's Straits Times Index advanced 0.4 per cent. Investors have been more upbeat about the US and China trade dispute, and Chinese President Xi Jinping today added to that sentiment by saying more needs to be done to bring down trade protections.
New Zealand and China reached a deal to upgrade their existing free trade agreement yesterday, however, that didn't spur on the local market today, which has a large number of domestically focused firms, such as power and telecommunications utilities and property firms.
"Look at the number of exporters on the market - there's not a huge number to be honest," said Grant Williamson, a director at Hamilton Hindin Greene.
Among those exporters, Fisher & Paykel Healthcare rose 1.4 per cent to $19.82, Air New Zealand was up 1.1 per cent at $2.89 and Sanford rose 1 per cent to $7.14.
Fletcher Building led the market higher, up 3.2 per cent at $4.85 on a volume of 2.3 million shares, more than its 90-day average of 1.6 million. The stock has gained 5.9 per cent so far this month, having been sold down through October on the expectation that it would be removed from the MSCI New Zealand Index.
Retirement village operators rose for a second day after Barfoot & Thompson figures indicated the Auckland property market continued to recover.
Ryman Healthcare was up 2.3 per cent at $13.45, Arvida Group rose 2 per cent to $1.55, Oceania Healthcare increased 1 per cent to $1.04, and Summerset Group advanced 0.8 per cent to $6.60.
A2 Milk fell 1.5 per cent to $12.76 and supplier Synlait Milk was down 0.7 per cent at $9.40. Williamson said A2 had been under pressure since its last trading update, and that investors were hoping the next one would be better. The milk marketing firm was a major beneficiary at last year's online Singles Day sales in China, and next week's event could prove to be another boon for the company.
Dairy prices are expected to extend recent gains at tomorrow's Global Dairy Trade auction, while Fonterra Cooperative Group will hold its annual meeting on Thursday. Fonterra Shareholders' Fund units were down 0.7 per cent at $4.05.
Contact Energy increased 0.3 per cent to $7.25 on a volume of 1.5 million shares and Meridian Energy was up 0.2 per cent at $5.13 with 2 million shares traded. Genesis Energy fell 1.6 per cent to $3.18, Trustpower was down 0.2 per cent at $8.26 and Mercury NZ was unchanged at $4.87.
Williamson said uncertainty about the Tiwai Point smelter's future continued to hang over the power companies, which were sold off aggressively last month when Rio Tinto said it was reviewing the smelter's future. ANZ New Zealand figures today showed locally produced aluminium prices were down 15 per cent in October from a year earlier.
"It's possible that Rio could close down a line rather than the whole smelter if prices remain depressed," he said. "The odds are certainly in favour of it remaining open, but closing it down is up to Rio."
Westpac Banking Corp posted the day's biggest fall, down 2.4 per cent at $29.27 with 34,300 shares traded. The bank stock resumed trading today after it was halted for a A$2 billion ($2.1b) placement to help bolster its required regulatory capital.