New Zealand shares extended recent gains led by Guinness Peat Group and Xero as investors bought into companies that have been sold off this year seeking opportunities in a low interest rate environment. Kathmandu Holdings extended its decline.
The NZX 50 Index gained 10.358 points, or 0.2 percent, to 5552.097. Within the index, 21 stocks rose, 17 fell and 12 were unchanged. Turnover was a smaller than usual $84.6 million.
International markets were spurred higher last week after US Federal Reserve policymakers renewed optimism in global equities with their promise to be patient on raising interest rates. Meanwhile, Reserve Bank governor Graeme Wheeler has kept the official cash rate on hold at 3.5 percent, after hiking it 100 basis points between March and September, and pulled back its track for future increases as tepid inflation provides scope to let the economy grow rapidly for longer. Investors typically favour stocks when interest rates are low as fixed interest assets offer smaller returns.
"Things are starting to quiet down, obviously the holiday period approaches but the market is up slightly," said Mark Lister, head of private wealth research at Craigs Investment Partners. "We have had a very strong gains over the last few days from offshore markets as things really rebounded and that's continued."
Investors looked to buy into cheaper equities in a benchmark index which has gained 17 percent since the start of the year. Xero, the worst performer on the NZX 50 this year down 51 percent, advanced 3 percent to $15.70. GPG, the fourth worst having dropped 29 percent, led the benchmark index higher up 3.7 percent to 42 cents.