US-China optimism benefits NZ shares

Fletcher Building leads the local market higher

New Zealand shares joined a rally across Asia as investors remained confident the US and China would end their trade war. The S&P/NZX 50 Index increased 39.99 points, or 0.4 per cent, to 10,841.54. Within the index, 27 stocks rose, 16 fell, with seven unchanged. Turnover was $123.7 million.

International equity markets were broadly stronger, with Hong Kong’s

Hang Seng up 0.5 per cent in afternoon trading, Australia’s S&P/ASX 200 Index rose 0.2 per cent, and Singapore’s Straits Times Index advanced 0.4 per cent. Investors have been more upbeat about the US and China, and Chinese President Xi Jinping yesterday added to that sentiment by saying more should be done to bring down trade protections.

New Zealand and China reached a deal to upgrade their free trade agreement on Monday, though that didn’t spur on the local market yesterday, with its many domestically focused firms.

“Look at the number of exporters . . . there’s not a huge number, to be honest,” said Grant Williamson, a director at Hamilton Hindin Greene.

Among those exporters, Fisher & Paykel Healthcare rose 1.4 per cent to $19.82, Air New Zealand was up

1.1 per cent at $2.89 and Sanford rose 1 per cent to $7.14.

Fletcher Building led the market higher, up 3.2 per cent at $4.85 on a volume of 2.3 million shares, more than its 90-day average of 1.6 million. The stock has gained 5.9 per cent this month, having been sold down through October on the expectation it would be removed from the MSCI New Zealand Index.

Retirement village operators rose for a second day after Barfoot & Thompson figures indicated the Auckland property market continued to recover. Ryman Healthcare was up 2.3 per cent at $13.45, Arvida Group rose 2 per cent to $1.55,

Oceania Healthcare increased 1 per cent to $1.04, and Summerset Group advanced 0.8 per cent to $6.60.

A2 Milk fell 1.5 per cent to $12.76 and supplier Synlait Milk was down 0.7 per cent at $9.40. Williamson said A2 had been under pressure since its last trading update. The milkmarketing firm was a major beneficiary at last year’s online Singles’ Day sales in China, and next week’s event could be another boon for it.

Dairy prices are expected to extend recent gains at today’s Global Dairy Trade auction, while Fonterra Cooperative Group will hold its annual meeting tomorrow. Fonterra

Shareholders’ Fund units were down 0.7 per cent at $4.05. Contact Energy increased 0.3 per cent to $7.25, and Meridian Energy was up 0.2 per cent at $5.13. Genesis Energy fell 1.6 per cent to $3.18,

Trustpower was down 0.2 per cent at $8.26 and Mercury NZ was unchanged at $4.87.

Williamson said uncertainty about the Tiwai Point smelter continued to hang over power companies, which were sold off aggressively last month when Rio Tinto said it was reviewing the smelter’s future. ANZ New Zealand figures showed locally produced aluminium prices were down 15 per cent in October from a year earlier.

Westpac Banking Corp posted the day’s biggest fall, down 2.4 per cent at $29.27 with 34,300 shares traded.