F&P Healthcare propels NZ index to eight-month high

An earnings upgrade from heavyweight Fisher and Paykel Healthcare powered the New Zealand sharemarket to its highest close in nearly eight months, and a hot Wall Street continued to set new records.

The S&P/NZX 50 Index traded strongly following an early-morning rise and finished at 11,978.62, up 62.91 points or 0.53 per cent after reaching an intraday high of 12,002.47.

The index was last at this peak on August 1 last year with 11,980.41 points. It gained 1.8 per cent this week and is up the same amount for the year to date.

There were 75 gainers and 55 decliners on the main board with 34.01 million shares worth $113.84m changing hands.

In the United States, the Dow Jones Industrial Average neared 40,000 points for the first time in its 128-year history after gaining 0.68 per cent to 39,781.37.

The S&P 500 broke through 5200 points for the first time with a 0.32 per cent increase to 5241.53, and Nasdaq Composite was up 0.2 per cent to a new high of 16,401.84 – all because the Federal Reserve kept interest rates unchanged and indicated three rate cuts this year.

Fisher and Paykel Healthcare and Manawa Energy both announced increased earnings forecasts following dairy giant Fonterra's strong firsthalf result the day before.

Shane Solly, portfolio manager with Harbour Asset Management, said the upgrades caught investors on the hop.

“They were healthy upgrades and we haven’t had them for a while. People have been observing the slowing economy, but the sharemarket is not the economy and it is a reminder that the market is not dead; it’s just sleeping. But maybe it’s waking up now.”

Fisher and Paykel Healthcare, which has the highest 12.75 per cent weighting on the NZX, surged $1.40 or 5.68 per cent to $26.04 on trade worth $16.15m after upgrading its full-year revenue guidance to $1.73 billion, from $1.7b, and net profit to $260m-$265m, from $250m-$260m.

Manawa Energy rose 16c or 3.76 per cent to $4.42 after increasing its full-year operating earnings (ebitdaf ) guidance to $142m-$147m, up from $120m-$140m.

Amongst other energy stocks, Vector was up 8c or 2.12 per cent to $3.85, and Mercury was down 12c to $6.78.

The Warehouse continued to rise off the mat, gaining 3c to $1.53. SkyCity increased 4c to $2; Rakon rose 6c to $1.20; and a2 Milk reached a 12-month high after adding 13c to $6.77. Hallenstein Glasson was up 10c to $6.25; AFT Pharmaceuticals increased 11c to $2.95; PGG Wrightson rose 11c to $2.16; Green Cross Health increased 3c to $1.07; NZ Oil & Gas improved 2c to 44c; and Foley Wines was up 3c to $1.02.

Auckland International Airport declined 14.5c to $8.18; Tourism Holdings shed 12c to $3.10 and Vista Group decreased 7c to $1.92.