NZ shares extend strong start to 2020 as blue chips gain

Z Energy led the market higher, up 3.3 per cent at $4.75. Photo / File

New Zealand shares continued their strong start to the decade, with a raft of blue-chip stocks leading the benchmark index higher. Gentrack bounced back from its sharp sell-off in recent days.

The S&P/NZX 50 Index rose 62.35 points, or 0.5 per cent, to 11,800.21. Within the index, 30 stocks rose, 15 fell and five were unchanged. Turnover was $122.3 million.

The New Zealand and Australian stock markets were the best performers across Asia, with the S&P/ASX 200 Index up 0.5 per cent in afternoon trading. Stock markets have been buoyed this week by US-China trade tensions easing, which along with global monetary policy stimulus may have averted an economic downturn last year.

Among stocks with global exposure, A2 Milk rose 2.4 per cent to $15.16 and its supplier Synlait Milk was up 0.8 per cent, while logistics firm Mainfreight increased 1.5 per cent to $43.40.

Shane Solly, a portfolio manager at Harbour Asset Management, said activity in China continues to be robust for A2.

"Some of the surveys and information coming through from the ground up are showing A2 continues to grow its market share of the infant formula market in China," he said. With reporting season next month, investors will be keen to see how A2 is performing in China, he said.

Electricity stocks were also among the day's gainers, with Meridian Energy's December update this week boosting investor confidence in the generator-retailers.

Meridian rose 2.3 per cent to $5.33 on a volume of 1.87 million, Mercury NZ increased 1 per cent to $5.30, Trustpower was up 0.8 per cent at $7.36 and Genesis Energy advanced 0.8 per cent to $3.26. Contact Energy was unchanged at $7.55 on a volume of one million shares.

ASX-listed Rio Tinto today reiterated it was reviewing the Tiwai Point smelter, which is New Zealand's biggest electricity user. The threat of the smelter closing weighed on electricity stocks last year, stalling their gains.

Rio has previously tried and failed to sell its Australian and New Zealand aluminium smelters as a separate entity. T

"There's potential for that to occur again going forward," said Solly. "Tiwai would be a helpful part of the equation. It's a good operation in the Rio aluminium group."

Stocks that had been beaten up in recent months were also among the day's gainers.

Gentrack rose 3 per cent to $2.72, recovering from its 33 per cent slump over the past two days, when it primed the market for another earnings downgrade.

Z Energy led the market higher, up 3.3 per cent at $4.75 on a volume of 688,000 shares, less than its 90-day average of 804,000. Fletcher Building rose 2.3 per cent to $5.43, with 1.5 million shares traded.

Metlifecare was the most traded stock on a volume of 3.2 million shares. It increased 0.2 per cent to $6.89, still shy of the $7 takeover offer.

Spark New Zealand increased 0.1 per cent to $4.535 with 1.2 million shares traded.

Heartland Group decreased 1.6 per cent to $1.83 on a volume of 970,000 shares, almost four times its 231,000 daily average. That was the day's biggest fall on the NZX50.

Outside the benchmark index, TIL Logistics dropped 5.3 per cent to $1.08 after it said first-half earnings would be down by as much as 40 per cent and it suspended its interim dividend due to softer freight volumes.