New Zealand shares joined a rally across Asia, as upbeat investor sentiment spilled over from Wall Street's close on Friday on optimism over a late-stage trial for a hopeful Covid-19 treatment.
The S&P/NZX 50 Index rose 39.93 points, or 0.4 per cent, to 11,434.79. Within the index, 25 stocks fell, 18 rose, and seven were unchanged. Turnover was $149.3 million.
The positive sentiment from Wall Street on Friday night spilled over into Asia today. Australia's S&P/ASX 200 was up 0.7 per cent in late trading, Hong Kong's Hang Seng gained 0.9 per cent, Shanghai's Composite Index was up 1.3 per cent and Japan's TOPIX climbed 2.2 per cent.
ASB Bank economist Chris Tennent-Brown said markets were ignoring the rising number of new Covid-19 cases and focusing on the emergence of possible treatments, such as Gilead's remdesivir which was shown to support recovery in a field trial of 300 patients.
"We were always going to have a positive day," said Mark Lister, head of private wealth research at Craigs Investment Partners.
The Friday rally on Wall Street with "high-flying tech stocks" hitting new records had given the local benchmark a solid start this morning, he said.
Internet infrastructure firm Chorus gained 2.8 per cent at $7.27, recovering from a selloff on Friday when the Commerce Commission said it would review some regulations on the firm.
"Chorus was blindsided by those comments out of the Commerce Commission that added to the regulatory uncertainty, but it seems to have recovered some of those losses today," Lister said.
Port of Tauranga posted the day's biggest gain, up 4 per cent at $7.73 on a light volume 73,000 shares.
Spark New Zealand rose 2.2 per cent to $4.70 and Vector advanced 1.1 per cent to $3.65. Lister said they were gaining as investors sought reliable dividends as an alternative to the electricity sector.
Contact Energy increased 0.5 per cent to $5.65, after dropping 16.1 per cent last week after Rio Tinto announced it would close its aluminium smelter at Tiwai Point.
Other energy companies were weaker. Mercury NZ declined 0.2 per cent to $4.67, Meridian Energy fell 0.2 per cent to $4.50 and Trustpower slipped 0.4 per cent to $6.87.
Summerset Group Holdings advanced 1.4 per cent to $7.10 and Oceania Healthcare rose 1.1 per cent to 96 cents, potentially benefitting from the possibility that Metlifecare will be taken off the share market if private equity firm EQT's takeover offer at $6 per share is accepted.
Lister said investors who want to hold exposure to the retirement sector may be seeing Oceania as an attractive alternative. Metlifecare rose 0.7 per cent to $5.88.
The benchmark was propped up by heavyweight stocks. A2 Milk Company increased 0.8 per cent to $20.70 and Fisher & Paykel Healthcare gained 0.8 at $35.59, helping to prop up the index as a majority of stocks fell.
Restaurant Brands New Zealand posted the day's biggest decline, falling 6.3 per cent to $11.31 after an unexpected 4.3 jump on Friday.
Tourism Holdings fell 4.2 per cent to $1.82, Auckland International Airport declined 2.2 per cent to $6.10, Air New Zealand dropped 1.9 per cent to $1.31 and Vista Group International fell 1.5 per cent to $1.28.
"Virus flare-ups have reminded people we are not out of the woods yet. If you are in the tourism game or the movie theatre game, all those stocks are sensitive to lockdowns," Lister said.
Outside the benchmark index, Augusta Capital's independent directors are unanimously recommending the takeover offer from ASX-listed Centuria in the absence of a higher offer.
Centuria is offering 22 cents in cash – raised from 20 cents on July 2 – and 0.392 Centuria shares for each Augusta share. At today's closing price, which remained unchanged at 90 cents, that values the offer at 91 cents per share.