NZ shares buoyed by Mainfreight's upbeat outlook

New Zealand shares were led higher by Mainfreight. Photo / File

New Zealand shares were led higher by Mainfreight after the logistics group's earnings weathered the worst of the Covid-19 crisis at a time when investors grow more optimistic about the global economy reopening.

The S&P/NZX 50 Index rose 134.45 points, or 1.2 per cent, to 11,049.19. Within the index, 38 stocks rose, 10 fell and two were unchanged.

Mainfreight led the market higher, up 13.9 per cent at $41 after keeping its final dividend unchanged and reporting a small increase in annual underlying earnings. Its result was pushed around by new accounting rules.

Sam Dickie, a senior portfolio manager at Fisher Funds, said Mainfreight's ability to weather the Covid crisis meant the firm would come out stronger than it went in. This put the logistics firm in a category with other winners such as A2 Milk and Fisher & Paykel Healthcare.

A2 fell 1.4 per cent to $18.94 and F&P Healthcare declined 0.6 per cent to $30.81.

Sam Trethewey, a portfolio manager at Milford Asset Management, said Mainfreight's earnings coincided with growing optimism from international investors that the worst of the economic crisis had passed,

The two dual-listed Australian banks also saw double-digit gains today. The sector has lagged behind the broader market throughout the crisis as the spectre of debt defaults and another global financial crisis caused investors to steer clear.

Australia & New Zealand Banking Group jumped 11.9 per cent to $19.59 and Westpac Banking Corp rose 10.9 per cent to $19.19. Both companies are still down more than 24 per cent this year.

Trethewey said the financial sector had fallen and stayed down until it caught the attention of investors looking for the next opportunity.

"The financial sector had underperformed materially post-Covid. Today investors had the confidence to get back onboard and it has happened in a big aggressive way."

This sudden rush on the financial sector was driven by a similar trend on Wall Street overnight where investors moved out of tech companies and into financial stocks. The S&P 500 rose 1.2 per cent overnight while the tech-heavy Nasdaq edged up just 0.2 per cent.

The Australian financial sector pulled the ASX into positive territory. The S&P/ASX 200 was trading up 0.4 per cent at 5pm in Wellington. Australia's third largest bank - National Australia Bank - more than doubled its capital raising offer from A$500 million ($536m) to A$1.25 billion citing strong demand from retail shareholders.

Fletcher Building rose 4.8 per cent to $3.43. Trethewey said this was another example of investors' willingness to take on risk, sensing opportunity in the harder hit stocks.

Air New Zealand increased 4.2 per cent to $1.375 and Auckland International Airport advanced 3.5 per cent to $6.54, with speculation that a trans-Tasman bubble may arrive earlier than expected.

Tourism Holdings increased 0.7 per cent to $1.55, while SkyCity Entertainment Group fell 2.7 per cent to $2.50, posting the day's biggest loss.

Z Energy gained 0.3 per cent at $2.94, as fuel volumes continue to recover and Refining NZ rose 1.4 per cent to 72 cents.

Courier company Freightways increased 0.7 per cent to $6.95.

Trustpower declined 2.2 per cent to $7.14. New Zealand's fifth-largest energy retailer today reported a 16 per cent drop in earnings to $186.5m for the March year. The company also trimmed its final dividend by 1.5 cents a share, holding back about $4.7m for extra flexibility.