Shares rise on optimism US and China will avoid trade war

Fisher & Paykel Healthcare closed up 37c at $13.63. Picture / Dean Purcell

New Zealand shares rose as the local bourse joined a region-wide rally on optimism the US and China will manage to avoid a trade war that could slow global growth. Sky Network Television, Fisher & Paykel Healthcare and Spark NZ led broad-based gains. Orion Health jumped 11 per cent.

The S&P/NZX 50 Index rose 60.86 points, or 0.7 per cent, to 8,454.1. Within the index, 29 stocks rose, 10 fell and 11 were unchanged. Turnover was $100.8 million.

The Dow Jones Industrial Average dropped 2.3 per cent on Friday in the US but US stock futures have gained in Asia and among regional benchmarks, Japan's Topix was up 0.6 per cent, the Straits Times Index rose 0.4 per cent and across the Tasman the S&P/ASX 200 Index rose 0.3 per cent in afternoon trading.

The gains in New Zealand stocks today "are pretty consistent with elsewhere in Asia", said Greg Smith, head of research at Fat Prophets in Auckland. "Last week was one of the more volatile weeks. Global markets have been on a knife edge, or a tweet-edge," he said. While some were predicting a dire outcome for the global economy, "the only outcome is a negotiated win".

Traders were now awaiting a speech by China's president Xi Jinping on Tuesday for any signals about the trade spat, he said.

Sky TV led the index higher, gaining 4.3 per cent to $2.45. The stock has tumbled on concern about the inroads streaming rivals are making on the company's pay-TV market share and more recent news that it isn't the preferred bidder for the Rugby World Cup in 2019 and that long-serving chief executive John Fellett is retiring.

"There's not going to be a magic wand" for Sky TV, Smith said. "They're not going to get rid of their problems overnight - the disruption from Netflix and others."

Fletcher Building rose 2.1 per cent to $5.97, having dropped about 26 per cent in the past 12 months on losses from its Building + Interiors unit. Spark rose 1.6 per cent to $3.395.

Fisher & Paykel Healthcare closed up 37c at $13.63. Trade Me Group, the auction website, rose 1.6 per cent to $4.44. Argosy Property rose 1 per cent to $1.01 and Kathmandu gained 1.2 per cent to $2.57.

Pushpay Holdings was the biggest decliner on the NZX 50, falling 2.1 per cent to $4.17. Heartland Bank fell 1.7 per cent to $1.70 and Synlait Milk fell 1.6 per cent to $8.82.

Outside the benchmark index, Orion Health rose 11 per cent to 80c, adding to a 20 per cent surge on Friday on speculation it is negotiating a trade sale after the health software developer said it was pursuing "potentially significant transactions".