Market commentaries

WELLINGTON: New Zealand shares rose in heavy trading as several stocks entered MSCI indices. New entrant Synlait Milk led gains alongside Mercury NZ. a2 Milk Co fell.

The S&P/NZX 50 Index advanced 10.93 points, or 0.1%, to 8658.79. Within the index, 26 stocks rose, 18 fell and six were unchanged. Turnover was $1.26 billion. Market watchers and market operator NZX had anticipated this might be the biggest day of trading for the market, which hit a record $1.6 billion in trading one day in 2017.

The changes announced earlier this month in the semiannual review of the MSCI Equity Indexes were implemented yesterday. A2 Milk was included in the MSCI Global Standard Index, exiting the MSCI Global Small Cap Index, and Mercury left the standard index to join the small cap, an index which Restaurant Brands New Zealand, Synlait and Tourism Holdings also joined.

Investors who follow the indices are required to hold a certain amount of the stock, and changes cause selling and buying in new or departing stocks. NZX made amendments to trading times yesterday to accommodate the heavier flows. The preclose session was 15 minutes longer than usual and started at 4.30pm, while the adjust session lasted until 5.50pm, rather than the usual 5.30pm, meaning inquiry (when the market closes) also took place at 5.50pm.

A2 Milk, which was bought up following the announcement on May 15, has been sold off lately, after an earnings update disappointed investors. The stock ended the day down 0.1% to $10.87, having traded as high as $11.13 and as low as $10.80 throughout the day.

‘‘Considerable index passivetype funds usually buy at the closing prices. They don’t want to take any intraday risk,’’ Craig Stent, executive director and head of equities at Harbour Asset Management, said. ‘‘There are people that buy for index reasons, but there are also hedge funds and people that arbitrage this so they get ahead of it and they do the opposite of what the index fund is doing. So there’s lots of noise but when it comes to the crunch at the end of the day, not much tends to happen in terms of the share price in these bigger companies.’’

Synlait was the best performer, up 5.1% to $11.25, and Mercury gained 2.4% to $3.23. Tourism Holdings fell 2.1% to $6.53.

Restaurant Brands dipped 1.1% to $7.78. Along with joining the smallcap index, the fastfood operator announced it had lifted firstquarter sales 12% to $180 million after it acquired a further 13 KFC stores in Australia. It also shed rights to an 18c per share dividend.

Trustpower was the worst performer on the index, down 4.4% to $5.65, after shedding rights to a 17c per share dividend. Air New Zealand fell 3.5% to $3.13, Sky Network Television dropped 3.3% to $2.32, and Meridian Energy declined 2.1% to $2.985.

A The Australian sharemarket finished higher after energy stocks rallied on stronger oil prices and local retailers gained on news Amazon will block Australian consumers from buying products from its overseas sites.

The benchmark S&P/ASX200 index closed up 27.2 points, or 0.45%, at 6011.9 points, and the All Ords finished 29.7 points, or 0.49%, higher at 6123.5 points. — BusinessDesk/AAP