Shares edge up amid US-China barbs

Hard-hit Oceania leads gainers on light day’s trading

New Zealand shares rose in light trading ahead of public holidays in the US and UK, as investors remain wary of growing tensions between the US and China.

The S&P/NZX 50 Index advanced 113.17 points, or 1.1 per cent, to 10,775.80. Within the index, 33 stocks rose, 11 fell and six were unchanged. Turnover was $74.4 million, the lowest since January.

The local market started the week on a tentative note as investors continued to digest China’s decision last week to scrap its annual growth target. Separately, Chinese lawmakers seeking greater control over semiautonomous Hong Kong aggravated an already tense relationship with the US.

Hong Kong’s Hang Seng index fell 1 per cent yesterday after the US responded by threatening to sanction the city and undermine its status as a financial hub.

However, the New Zealand and Australian markets followed a warm lead from Wall Street, which performed a last-minute U-turn on Friday night to close marginally higher despite trading weaker throughout most of the session. The S&P/ASX 200 was up almost 1.5 per cent in afternoon trading.

Michael McCarthy, chief market strategist at CMC Markets, said he was surprised to see such a strong Australasian performance considering the risks that come with rising tension between the US and China. He said trading volumes were lighter than usual as Singapore, the United Kingdom and the United States were all on public holidays yesterday.

Oceania Healthcare led the local market higher, rising 3.8 per cent to 83 cents. Grant Williamson, a director at Hamilton Hindin Greene, said the aged care provider started to gain last week and has built up some momentum. “It was . . . hit extremely hard in the sell-off and maybe bargain hunters are just coming back for it,” he said. Its share price is still down 36 per cent this year.

Z Energy rose 3.6 per cent bring it back up to its capital raising price of $2.90. Fisher & Paykel Healthcare increased 3.3 per cent to $30.15 and a2 Milk rose 1 per cent to $19, although both on light volumes.

Kiwi Property Group rose 2.1 per cent to 96 cents. The company reported a net loss of $186.7m as an already announced $290m writedown in its property values hit the bottom line.

Infratil increased 1.3 per cent to $4.77. Tilt Renewables, which is controlled by Infratil, rose 0.3 per cent to $3.15 after reporting a net profit of A$478.4m ($512.6m) as the wind farm developer benefited from the sale of a wind farm for a A$486m gain. Tilt shareholders will vote to approve a capital return next month.

Air New Zealand rose 0.8 per cent to $1.255. It extended its schedule of minimal international operations by another two months to August 31.

Auckland International Airport also rose, gaining 3.1 per cent at $5.98.

Sky Network Television yesterday completed the first phase of a capital raising, bringing in $119.2m from investors to shore up its balance sheet. The television network’s shares dropped 48.2 per cent to 17.1 cents when trading resumed, still comfortably above the 12-cent placement offer.