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MARKET CLOSE: NZ shares rise as Fed under-delivers

MARKET CLOSE: NZ shares rise as Fed under-delivers; Telecom, Fletcher, Ebos gain

Dec. 19 (BusinessDesk) – New Zealand shares rose, with the NZX 50 Index clawing back most of yesterday’s selloff, after the Federal Reserve announced a smaller than expected reduction in stimulus and figures showed economic growth that beat estimates. Telecom, Fletcher Building and Ebos Group paced the gains.

The NZX 50 gained 31.182 points, or 0.7 percent, to 4707.060. Within the index, 26 stocks rose, 16 fell and eight were unchanged. Turnover was a lower-than-average $93.5 million.

Stocks on Wall Street rallied and the gains continued across much of the Asia Pacific region after the Federal Reserve cut its monthly bond buying programme by US$10 billion to US$75 billion, while signalling any further tapering will be determined by the strength of the world’s biggest economy. In New Zealand, the economy grew 1.4 percent in the third quarter.

“The taper was a little on the softer side than thought, and that’s helping,” said James Lindsay, portfolio manager at Tyndall Investment management. “US markets did a remarkable turnaround, where the Nasdaq was down 1 percent when it came out, and closed up 1 percent.”

Telecom rose 2.6 percent to $2.35, Ebos gained 2.3 percent to $9 and Fletcher rose 2.2 percent to $8.53.

A2 Corp, which markets milk with a protein variant said to have health benefits, climbed 2.7 percent to 77 cents and has advanced 42 percent this year. Sky Network Television rose 1.7 percent to $5.84 and Contact Energy rose 1.4 percent to $4.94.

Airworks ended its first day as a listed company at $2.75 after majority shareholder Hugh Jones sold down his stake in an initial public offering at $2.60. The IPO raised $37.5 million, of which $20 million is earmarked to fund the company’s expansion plans.

“It’s pleasing to see another company listed with a good record and good brand,” Lindsay said. “It’s exactly what the capital markets need.”

Diligent Board Member Services, which has delayed its first half results as it works on restating three years of revenue, fell 2.2 percent to $3.50 and was the biggest decliner on the benchmark index.

Chorus, the network operator, fell 2.1 percent to $1.40. MightyRiverPower fell 1.5 percent to $2, having been sold in a government IPO this year at $2.50.

Auckland International Airport rose 1.1 percent to $3.60.

(BusinessDesk)

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