New Zealand stocks rose after the Reserve Bank lifted the official cash rate, adding support to evidence for strong economic growth. Telecom, Air New Zealand and Trade Me Group paced the gain.
The NZX 50 Index advanced 15.961 points, or 0.3 percent, to 5195.11. Within the index, 21 stocks rose, 15 fell and 14 were unchanged. Turnover was $163.2 million.
Central bank governor Graeme Wheeler hiked the OCR a quarter-point to 3.25 percent, his third 25 basis points increase since he began his tightening cycle in March in a bid to fend off inflationary pressures. The currency gained as Wheeler showed no sign of slowing the pace of future rate hikes and deviating from his March projections.
"The big news today was the Reserve Bank," said Robert Garden, investment advisor for Craigs Investment Partners. "Ordinarily increasing interest rates aren't a positive for the market, but we're in early stages of the cycle and it does show proof that the economy is actually going steady and building momentum."
Telecom, the country's largest telecommunications provider rose 1.1 percent to $2.715. The stock is often seen as a proxy for the kiwi dollar as investors look for a place to park the currency, Garden said.