Market close: NZ shares rise with continual central bank support

Skellerup Holdings led the market higher, rising 3.8 per cent to $2.21. Photo / File

New Zealand shares rose for a fourth day as investors bet that further central bank stimulus and ongoing low interest rates will continue to support equities.

The S&P/NZX 50 Index gained 87.52 points, or 0.8 per cent, to 11,743.73. Within the index, 27 stocks rose, 20 fell, and three were unchanged. Turnover was $129 million.

Share markets across Asia started the week with a "positive mindset" after a front-page editorial in the China Securities Journal said "fostering a healthy bull market" was important to the Chinese economy, ASB economist Mark Smith said.

The state-sanctioned editorial triggered strong gains for Chinese equities yesterday and today, and NZ's benchmark joined the regional rise.

Peter McIntyre, an investment adviser at Craigs Investment Partners, said the steady upwards march was due to low interest rates and financial stimulus from central banks supporting equities and their promise of higher returns to investors.

"Bad news is now good news for equity markets because investors are really betting on further stimulus and lower interest rates for longer," McIntyre said.

"That tailwind is pretty strong, and I don't think it is going to die down anytime soon."

However, it isn't all just hot air, McIntyre said. Low interest rates and government bond buying enables companies to access cheap debt to fuel growth and shareholder returns.

"The useful use of that debt is to pay down high interest debt or acquire other companies," he said.

Skellerup Holdings led the market higher, rising 3.8 per cent to $2.21. The company yesterday said it will release its financial result to the market on August 21, having already given upbeat guidance.

McIntyre said the rubber products maker had been performing well since its update at the end of June saying it would deliver a full year profit above $28m and "strong shareholder returns in the years ahead."

Goodman Property Trust rose 2.4 per cent to $2.135 and Chorus advanced 2 per cent to $7.85.

Fisher & Paykel Healthcare increased 1.7 per cent to $35.74, having yesterday shed rights to its 15.5 cent per share dividend. McIntyre said growing Covid-19 numbers were supportive for healthcare stocks and was driving its upwards trajectory.

A2 Milk gained 1.4 per cent at $21.19. Both stocks have been stronger through the pandemic and now account for almost 30 per cent of the index. That combined weighting underpinned today's increase for the index.

Air New Zealand posted the day's biggest decline, falling 2.4 per cent to $1.42 and Auckland International Airport slipped 0.3 per cent to $6.37. The national carrier today agreed to temporarily suspend all new bookings into NZ for the next three weeks to help the government manage accommodation capacity at its isolation and quarantine facilities.

Meanwhile, a slower start to a transtasman bubble is looking more likely with Melbourne returning to six weeks of lockdown tonight after the virus re-emerged in the state of Victoria.

Pushpay Holdings declined 0.9 per cent to $9.13 as investors took some profit off the stock which has been trading near record highs. Across the Tasman, Australian fintech company Afterpay today announced a A$1 billion ($1.06b) capital raise.

Outside the benchmark index, Scott Technology climbed 9.1 per cent at $1.80. The robotics and automation firm said it expects earnings to take a material hit from the Covid-19 pandemic, but there are signals that revenue streams are returning to normal as a number of projects come back online.