MARKET CLOSE: NZ shares rally; Fletcher gains

MARKET CLOSE: NZ shares rally on optimism for global growth; Fletcher gains

July 16 – New Zealand shares rallied, driving the NZX 50 Index to its biggest gain in more than a month, as renewed optimism for a revival in global growth lifted companies including Fletcher Building and F&P Healthcare.

The NZX 50 rose 37.43, or 1.4%, to 2801.51, the third daily gain. Within the index, 26 stocks rose, 11 fell and 14 were unchanged. Turnover was NZ$102.9 million.

Fletcher Building, part of the winning consortium for Auckland’s Victoria Park roading contract, rose 2.6% to NZ$6.84. F&P Healthcare, which counts the U.S. among its biggest markets, climbed 2.1% to NZ$2.91.

Stocks on Wall Street rallied yesterday, helping fuel a global pick-up in stocks, after chipmaker Intel Corp. forecast higher-than-expected sales and Federal Reserve figures showed a recovery in manufacturing and industrial production. The Dow Jones Industrial Average climbed 3.1%.

Across Asia today, Hong Kong’s Hang Seng rose 1.6% in early afternoon trading and Japan’s Nikkei 225 rose 0.8%. Australia’s S&P/ASX 200 Index rose 1.7%, as a rebound in prices of metals lifted BHP Billiton and Rio Tinto.

APN New & Media, the publisher of the New Zealand Herald, rose 10% to NZ$1.84, leading the NZX 50 higher.

Fitch Ratings put outlook on New Zealand’s sovereign credit ratings to ‘negative’ from ‘stable’ today, citing the nation’s looming current account deficit and rising from debt levels.

Nuplex Industries, a maker of specialty chemicals, rose about 7% to NZ$1.69.

New Zealand manufacturing activity shrank at a slower pace in June as a record jump in new orders entered growth territory for the first time since April last year.

Manufacturing rose 3.1 points to 46.2, according to the Bank of New Zealand-Business NZ Performance of Manufacturing Index. The value was higher than the 45 recorded last June, but lower than the same period in previous years.

“A pick-up in orders would certainly gel with improving signs globally,” said Craig Ebert, economist at BNZ.

Manufacturing in New Zealand and Australia has benefited from a pick-up in
Chinese demand for raw materials, as the world’s fourth largest economy continues to exceed growth expectations. China’s gross domestic product grew 7.9% in the second quarter, speeding from a 6.1% pace in the first quarter.

Lion Nathan Ltd., the Australian brewer being taken over by its biggest shareholder, climbed 1.3% to NZ$14.58 after reiterating that annual profit may jump 16% on domestic beer sales.

“We are on track for a significant profit step-up in 2009,” chief executive Rob Murray said. Kirin Group today gained approval from the New Zealand Overseas Investment Office for its A$3.5 billion offer for the 54% of the shares it doesn’t already own.

PGG Wrightson fell 2% to 98 cents, leading the index lower. Skellerup Holdings fell 1.8% to 55 cents and Infratil Ltd. shed 1.7% to NZ$1.71.

(BusinessWire)

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