MARKET CLOSE: NZ shares rally, paced by Fletcher, Nuplex

MARKET CLOSE: NZ shares rally, paced by Fletcher, Nuplex on Australian growth

June 6 (BusinessDesk) – New Zealand shares rose after economic growth in Australia, the nation’s biggest trading partner, beat estimates and prices of dairy products rebounded from a three-year low. Fletcher Building, Nuplex Industries and Kathmandu paced the rally.

The NZX 50 Index rose 43.72 points, or 1.3 percent, to 3464.51. Within the index, 32 stocks rose, 11 fell and seven were unchanged. Turnover was a lower-than-average $53.7 million.

Australia’s economy grew 1.3 percent in the first quarter, more than twice the 0.6 percent pace forecast by economists. The report helped lift the S&P/ASX 200 Index off its lows and lifted stocks of New Zealand companies that garner revenue across the Tasman. A 13.5 percent gain in prices of dairy products, the nation’s biggest export, in Fonterra’s GlobalDairyTrade auction also helped sentiment.

Fletcher, which counts Australia as its second-largest market, climbed 2.6 percent to $6.30.

Kathmandu, the outdoor equipment chain that gets the largest portion of its sales in Australia, rose 7.9 percent to $1.50.

Strong Australian GDP and the lift in dairy product prices “has given some confidence to our market,” said Peter McIntyre, an adviser at Craigs Investment Partners.

Speculation that Federal Reserve chairman Ben Bernanke will announce a third round of stimulus when he addresses the US Congress on Thursday is also giving markets a “risk-on tone,” he said.

Goodman Fielder, the Australasian food maker, rose 6.9 percent to 77 cents.
Nuplex Industries gained 7.2 percent to $2.39. The specialty chemicals company this week said earnings this year would about match its 2011 results – the low end of its prediction that growth would be “flat to 5 percent year on year.”

“The Nuplex guidance was at least not off the end of the scale,” McIntyre said. “That’s given the market some confidence.”

Telecom, the biggest company on the bourse, rose 1.6 percent to $2.475, making up some of the ground lost yesterday when rival Telstra said it was in talks with Vodafone to sell its TelstraClear unit in New Zealand, a move that would produce a stronger competitor.

OceanaGold, the operator of the Macraes gold field, rose about 7 percent to $2.77 as spot gold held near a month-high at US$1624.06 an ounce.

NZX, the stock exchange operator, rose 5 percent to $1.26. McIntyre said the prospect of state-owned enterprises coming to the market may be buoying the shares.

Xero, the online accounting company, rose 0.5 percent to $4.10 and Diligent Board Member Services rose 4.9 percent to $3.41. The two companies will be added to the NZX 50 Index effective June 8, the NZX said today.

Kirkcaldie & Stains, the Wellington department store and property company, rose 3.6 percent to $2.90 a day after the Cushing family disclosed a holding of almost 20 percent.

Pumpkin Patch, the children’s clothing chain, was the biggest decliner, falling 4.4 percent to 87 cents. Rakon, which makes components for navigation systems and smart phones, fell 3.9 percent to 49 cents.

(BusinessDesk)

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