Market commentary

AUCKLAND: Canny investors moved some of their money from the onfire energy companies into higherdividend defensive stocks as the New Zealand sharemarket gained another half percent.

The S&P/NZX 50 Index increased 72.51 points or 0.54% to 13,558.19 in late trading after drifting for most of the day.

The rally came after the United States markets overnight headed towards record highs again.

Local volume was strong with 81.32 million shares worth $260.32 million changing hands, and there were 84 gainers and 64 decliners over the whole market.

Fastrising Meridian and Contact Energy were stalled by profittaking. Meridian fell 26c or 2.77% to $9.14 on trade worth $74 million, after reaching a low of $8.55 during the day's trading. Contact fell as low as $10.13 but recovered to close at $10.75, up 15c or 1.42% on trade worth $46.4 million.

Sam Dickie, senior portfolio manager with Fisher Funds, said it looked as if some investors were taking the Meridian and Contact money and putting it into other dividendyielding stocks.

He said the rise in price of those energy stocks had been the story of the week.

The iShares Global Clean Energy exchangetraded fund has increased its issue of shares and has gone out and bought more stocks, including Meridian and Contact.

``These stocks now make up more than 10% of the fund which has bought $850 million worth of Meridian and Contact shares over the past three months.

’’Renewable energy stocks are in vogue. How long this will last is anyone's guess,’’ Mr Dickie said.

Two recent strong movers had a down day. Ebos Group fell 70c or 2.38% to $28.70, and Freightways shed 20c, or 1.87%, to $10.50.

The Warehouse Group upgraded its halfyear earnings and its share price rose 5c or 1.82% to $2.80.

Fellow retailer Briscoe Group is also benefiting from the consumer spendup, rising 16c or 3.08% to $5.35.

Electronics manufacturer Rakon maintained its revival, climbing 5c or 6.94% to 77c a rise of more than 50% since it sat at 50c on December 24.

On Wall Street, the Dow Jones Industrial Average increased 0.69% to 31,041.13, the S&P 500 Index was up 1.48% to 3803.79, and the technologydriven Nasdaq Composite rose 2.56% to 13,067.48.

The Democratic sweep of the US Government gave fresh hope that more economic stimulus was on its way including $US2000 ($NZ2754) cheques for most Americans and increased infrastructure spending. — The New Zealand Herald