The S&P/NZX 50 Index rose to a record as investor confidence recovered from yesterday's fears over the outbreak of coronavirus in China. A2 Milk led the gain.
The benchmark index advanced 84.54 points, or 0.7 per cent, to 11,889.68. Within the index, 24 stocks rose, 23 fell, and three were unchanged. Turnover was $185.9 million.
"We are performing well, as is most of Asia today, and are seeing a number of stocks hold up quite nicely on a reasonable trading volume," said Peter McIntyre, an investment adviser at Craigs Investment Partners.
Stocks markets across Asia bounced back from yesterday's sell off, when investors fretted over the threat of the coronavirus outbreak and whether it would sap international travel during the Lunar New Year. Hong Kong's Hang Seng was up 0.8 per cent in afternoon trading and Australia's S&P/ASX 200 Index rose 1 per cent.
A2 Milk lead the local market higher, with an increase of 4.1 per cent to $16.04 on a volume of 805,000 shares.
"They've really gained some momentum for the last couple of trading days. A2 would be a pick of many brokers to perform well in 2020. You've also seen that the phase one of China-US trade deal has taken a little bit of edge off that stock," McIntyre said.
Metlifecare was again the most traded stock on a volume of 7.7 million shares. The stock decreased 0.2 per cent to $6.86, below the $7 takeover offer. Swedish buy-out firm EQT today said that some of the institutional investors that had indicated they'd accept the offer have since sold down their holdings.
"A number of larger holders have looked at where the takeover price is and where the current share price is and thought that has narrowed," he said.
Utility companies saw heavier trading, with Meridian Energy down 1.1 per cent at $5.33 on a volume of 2 million shares, Contact Energy fell 1.7 per cent to $7.42 on a volume of 1.8 million and Infratil rose 0.6 per cent to $5.43 on a volume of 1.3 million.
Investors remained nervous about stocks with direct exposure to the tourism sector.
Tourism Holdings fell 2.4 per cent to $3.20 on a volume of 248,000 shares, and Air New Zealand fell 1.3 per cent to $2.97 on a volume of 2.8 million shares.
"Air New Zealand has given up close to 5 per cent in the last couple of days, but that's unsurprising considering the impact coronavirus can have on travel plans," McIntyre said
Auckland International Airport bucked this trend and rose 0.8 per cent to $9 on a volume of 617,000 as it found favour with investors seeking an income-producing asset.
McIntyre said investors have been very keen to buy the stock when it dips below the $9 mark. That trading pattern had been in place since September, he said.
The biggest decline was New Zealand Refining which fell 2.9 per cent to $1.65 - its ninth straight decline - on a volume of 1 million shares. The stock typically trades on a volume of 169,000. Yesterday, the company announced that processing income and margins had dropped off in the last two months of 2019.
"Even though they indicated the US-China trade deal was impacting on their margins and were confident they would rise across 2020, some parts of the market were disappointed with that number and have decided to exit."
Fonterra Shareholders' Fund units slipped 0.3 per cent to $4.03 after dairy prices rose at today's Global Dairy Trade auction. Westpac economists today lifted their forecast payout to farmers by 30 cents to $7.40 per kilogram of milk solids. Rival processor Synlait Milk, which supplies A2, rose 2.2 per cent to $8.88.
Outside the benchmark index, New Zealand King Salmon increased 1.9 per cent to $2.20. The salmon farmer has encountered more opposition to planned ocean farming than it anticipated, but is still confident of securing resource consent.
Wellington Drive Technologies rose 6.8 per cent to 17.4 cents. The company yesterday said it had passed a million units sold of its 'internet of things' platform.