NZX 50 stockmarket sets record high, finally

Bull market: New Zealand's NZX 50 is on its way, hitting a new high and up nearly 14 per cent since last September. Picture / File

After more than nine months treading water the NZX 50 broke through to a record high this afternoon.

The index topped last September's peak of 7571 points about 3.30pm. It closed up 0.5 per cent at 7592 at 5pm.

Globally sharemarkets took a hit last year on rising interest rates and global insecurity after Brexit in Britain and President Donald Trump's election in the United States.

Although US markets surged back on hopes that Trump would accelerate economic growth with new spending and tax cuts, the NZX tracked sideways.

The NZX 50 was hit harder than many other markets, said Craigs Investment Partners' head of private wealth research, Mark Lister.

"So our decline was about 12 per cent from early September to November, so we had a bit further to climb back," he said.

The New Zealand market had outperformed the rest of the world up until that last record in September as international investors chased our high-yielding, stable dividend stocks.

The rise in interest rates last year had seen many investors reversing that position.

Meanwhile the stable economy and some strong-performing companies such as A2 Milk, Mainfreight, Xero and Fisher & Paykel Healthcare had helped keep the NZX 50 ticking over this year, Lister said.

A2 Milk continued its strong run, rising 5.7 per cent to $4.07, a new record.

The Auckland-based, Sydney-headquartered milk marketer last week lifted annual sales guidance for the second time in as many months as it beefed up production to meet sweltering Chinese demand for infant formula.

On top of solid corporate results, there were some signs that international markets were now questioning whether the speed of interest-rate rises would continue.

"So will Trump get his tax plan through, will the Fed be able to hike rates as much as we thought? A couple of inflation reports have been disappointing. All of those things have made people question whether interest rates will go up as much as they thought and all of a sudden the New Zealand market is back in vogue."

Global equities are climbing back after a technology-sector selloff weighed on stocks last week. Trading volumes were the highest since mid-March as poor housing data and a drop in consumer sentiment added to signs the American economy's growth rate may be slower than forecast. That's keeping bond yields down amid a subdued pace of inflation that's sowed doubts about the Federal Reserve's planned trajectory for monetary tightening.

While the NZX gross index's bounce to a new high was good news, Lister said, we should remember that the index includes cash dividends.

"If we look at NZ share prices only [and ignore dividends], the market is still 3 per cent below the peak from nine months ago."

- additional reporting agencies