Market close: Bargain hunters lift stocks after weak session

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End-of-the-month portfolio rebalancing drove the New Zealand sharemarket higher after spending most of the day in negative territory.

The S&P/NZX50 index finished up 0.7 per cent, at 12,227.29, after being down by about 1 per cent earlier in the session.

Turnover came to 104.5m shares worth $397.8 million, with 35 rises and 114 falls.

Interest rates were the key driver for most of the day, with the high proportion of dividend-paying yield stocks bearing the brunt of selling.

Mark Lister, head of private wealth research at Craigs Investment Partners, said a late buying surge, driven by portfolio rebalancing, had taken the market into the black.

Lister, noting the local market has fallen further than most, said bargain hunting could also have been a factor.

The S&P/NZX50 had fallen 6.9 per cent over the month of February — its worst month since 2009, aside from its 13 per cent plunge last March as the border closed and the country went into lockdown.

Lister said investors had been spooked by the speed of interest rate rises, even though they were still very low by past standards.

A2 Milk staged a rebound, gaining 35c or 3.75 per cent to $9.69 after a sharp selloff after its half-year result on Thursday.

Tourism Holdings, which has been hit hard by Covid-19 border closures, gained 6c or 2.7 per cent to $2.25.

"For a company that is under all sorts of pressure, it has actually done a great job working its way through it, as has the Port of Tauranga, with all the supply chain issues around the world," Lister said.

Lister said the market's soft month did not "marry up" with the company reporting season, "which has actually been pretty good".

Contact finished the day well off its lows at $6.84, down 3c, but off January's peak of $10.75.

Meridian recovered by 14c or 2.5 per cent to $5.70, but was still a far cry from the month's high of $9.40.

Agribusiness stock Scales Group fell by 10c or 2.1 per cent to $4.60 after reporting a steady profit for the 2020 year but warning the current year's earnings could come under downward pressure.

F&P Healthcare rebounded — gaining 49c or 1.7 per cent to $29.25.

Fonterra units eased 1c to $5.02 but at current levels the stock is at its highest point since September 2018.

The units have been the second highest performing stock in the year to date, gaining 14 per cent, after Skellerup which has gained 17 per cent.