Shares claw back some losses

Meridian Energy was the worst performer, down 3.4 per cent to $3.455. Picture / Richard RobinsonAuckland Airport declines as longer-term bond yields rise

New Zealand shares regained some of Wednesday's losses, led upwards by A2 Milk Co, Heartland Bank and Fletcher Building, while Auckland International Airport declined.

The S&P/NZX 50 Index rose 1 per cent, or 69.50 points, to 6733.72. Within the index, 27 stocks rose, 20 fell and four were unchanged. Turnover was $191 million.

The local benchmark index dropped 3.3 per cent on Wednesday, turning to a loss around 3pm as it became increasingly apparent the US public had voted for Donald Trump as their new president. Yesterday morning, it bounced by as much as 3.4 per cent after positive leads from Wall St and European markets but pared those gains as the day wore on, lagging behind Asian markets in the afternoon.

"Our friends across the Tasman traded significantly higher -- it was a strong day for resources, which drove their market, and we were crimped a bit because of the interest-rate-sensitive stocks we have," said Peter McIntyre, investment adviser at Craigs Investment Partners.

"We saw swap rates both here and Australia really drive to the upside, on the basis that some of Trump's policies are very inflationary, and the Reserve Bank saying unless something dramatic happens we're unlikely to cut rates again.

"When longer-term bond yields rise, we're seeing a sell-off in our more interest-rate-sensitive stocks, and Auckland Airport is a good example of that -- it's a quality asset, but it's weaker," McIntyre said. Auckland International Airport was the third-worst performer on the index, down 2.6 per cent to $6.32.

New Zealand's two-year swap rate rose five basis points to 2.2 per cent and the 10-year swaps gained 25 basis points to 3.0875 per cent.

A2 Milk Co led the index, up 9.2 per cent to $2.14. On Wednesday it dropped 4.9 per cent to $1.96. On Tuesday, the milk marketer said its first-quarter sales of $112.5 million met expectations with sales driven by growth in infant formula and milk.

"That story of exporting to China hasn't gone away because of Trump," McIntyre said.

"It's done it again, that switch trade below and above $2. Its first-quarter update reaffirmed its position but was a bit soft, to be fair, but the market likes the story and it continues to be well bid on strong volumes. It's got a lot of liquidity so if investors need to reduce quickly, they're able to, and we've seen the cut and thrust of the stock again. If it was to break out above $2.20, the likelihood is it would go even higher from there."

Heartland Bank rose 6.3 per cent to $1.51, while ANZ Banking Group gained 5.9 per cent to $28.95 and Fletcher Building advanced 5.5 per cent to $10.02.

Meridian Energy was the worst performer, down 3.4 per cent to $3.455, while Precinct Properties dropped 2.8 per cent to $1.20.

Vital Healthcare Property Trust shed 2 per cent to $2.01. The Auckland-based hospital and healthcare property developer and investor, which raised $160 million in July to help fund its growth strategy, says it's in a strong position for growth and has A$77.9 million in six developments across Australia.

Goodman Property Trust dropped 0.8 per cent to $1.21. The NZX-listed commercial and industrial property investor lifted first-half profit 38 per cent, largely due to valuation gains on its investment properties, and maintained its full-year guidance.

Z Energy fell 0.1 per cent to $7.40. The service station operator raised its first-half dividend as it posted a 22 per cent gain in earnings and a 57 per cent jump in fuel volumes following its acquisition of Chevron NZ's Caltex and Challenge brands.