US data helps NZ index hit a four-month high

New Zealand shares rallied to a four-month high as some investors were encouraged by better-than-expected US jobs data and continued central bank support.

The S&P/NZX 50 index rose 56.18 points, or 0.5 per cent, to 11,558.70 — the highest close since March 5. Within the index, 23 stocks rose, 22 fell and five were unchanged. Turnover was $123.8 million.

Sharemarkets across Asia rose to their highest level since the end of February, based on the MSCI Asia Index.

Yesterday’s rally was driven by reports that non-farm jobs in the US increased by 4.8 million in June, beating the expectation of economists, who predicted an extra 3 million jobs.

The recuperating job market was taken by some investors as a signal of wider economic recovery and bolstered market sentiment, said ASB economist Mark Smith.

Trading volumes have been lighter than usual during the past week, which Michael McCarthy, chief market strategist at CMC Markets, said may be a reason to be suspicious of the rally. Anecdotally, retail investors were driving up prices while institutions had already trimmed their portfolios, he said.

“Enthusiastic individual investors are pushing prices, but the pros who are concerned don’t have anything to sell to them,” said McCarthy.

The leaders on the local benchmark yesterday were mostly stocks considered to be defensive in nature.

Internet infrastructure provider Chorus was up 3.8 per cent at $7.67 and Contact Energy gained 3.7 per cent at $6.70.

Retirement property developer Summerset Group Holdings rose 3 per cent to $6.59 and Stride Property advanced 2.7 per cent to $1.91.

Fuel retailer Z Energy rose 2.2 per cent to $2.81, while New Zealand Refining Company dropped 3.9 per cent to 74c.

Fisher & Paykel Healthcare slipped 0.4 per cent to $34.50. The stock is up 7.8 per cent this week following its blockbuster earnings result on Monday.

Among other exporters, Pushpay Holdings dropped 3.6 per cent to $9.06, Tourism Holdings fell 1 per cent to $1.90 and Skellerup Holdings edged 0.5 per cent lower to $2.12.

Kathmandu Holdings posted the day’s biggest decline, dropping 5.5 per cent to $1.20. On Thursday, the retailer bounced 11 per cent after it said it would be profitable at an operational level for the rest of the year. The stock is still up 4.4 per cent this week.

Market operator NZX held at $1.42. Total equity trades in June almost tripled from a year earlier. The total value of trades was almost double those last June at $5.2 billion.