Meridian, Genesis, Mercury lead NZ shares higher

Fraser Whineray, chief executive of Mercury Energy. Photo / File

New Zealand shares gained as growing bets for an interest rate cut by the Reserve Bank stoked demand for utility companies such as Mercury NZ, Meridian Energy and Genesis Energy with steady dividends.

The S&P/NZX 50 index rose 70.77 points, or 0.8 per cent, to 9,280.77. Within the index, 33 stocks gained, nine fell and eight were unchanged. Turnover was $187.6 million, of which Spark New Zealand accounted for $62.5m.

Stocks across Asia rose after US legislators reached an in-principle funding deal to avoid another Federal government shutdown. Australia's S&P/ASX index was up 0.3 per cent in afternoon trading, while Japan's Topix gained 2.2 per cent and China's Shanghai Composite Index rose 0.7 per cent.

"There's a bit of optimism around the Americans putting together something to avoid the shutdown at the end of the week," said Mark Lister, head of private wealth research at Craigs Investment Partners.

The Reserve Bank's policy review tomorrow also supported the local market today, as traders increasingly price in lower interest rates over the coming year.

Lister said that boosted companies with "highly attractive and sustainable dividend yields" such as the electricity generator-retailers, property stocks and other utilities.

Mercury led the market higher, up 2.7 per cent at a record close $3.75 on a volume of 752,000 shares, slightly more than its 90-day average. Genesis rose 2.6 per cent to $2.76 on a volume of 1.4 million shares, compared to its 334,000 average. Meridian gained 2.5 per cent to a record close $3.74 on 663,000, half its average volume.

Goodman Property Trust rose 2.2 per cent to $1.66 on a volume of 615,000, slightly more than average, while infrastructure investor Infratil was up 0.9 per cent at $3.99 on a volume of 1.5 million, more three times its usual volume.

Contact Energy, which yesterday reported increased earnings and a bigger-than-expected dividend, gained 1.1 per cent to $6.39 on a volume of 974,000.

Lister said Contact had underperformed other power companies in recent years, but that yesterday's result was "pretty solid".

Spark New Zealand was the most traded stock on a volume of 15.4 million, more than twice its 90-day average of 3.5 million. It gained 0.8 per cent to $4.055. Trade Me was unchanged at $6.37 on a volume of 3.3 million and A2 Milk gained 0.4 per cent to $13.45 on a volume of 1.8 million.

Among other companies trading on volumes of more than 1 million, Precinct Properties New Zealand rose 0.7 per cent to $1.53, Kiwi Property Group was unchanged at $1.45 and Chorus closed at a record $5.16, up 0.8 per cent. Fletcher Building rose 1.4 per cent to $5.16 and Z Energy was up 0.7 per cent at $6.

A weaker kiwi dollar was also a boon for exporters. Fisher & Paykel Healthcare increased 0.5 per cent to $13.74, Sanford rose 1.2 per cent to $6.85, both on smaller volumes than average. Scales Corp was up 1.1 per cent at $4.45 on slightly bigger volumes than normal.

Pushpay Holdings posted the biggest decline, falling 3.6 per cent to $3.20 on half its average volume, while Heartland Group decreased 1.5 per cent to $1.36 on a smaller-than-usual volume of 258,000.

Outside the benchmark index, Allied Farmers climbed 13 per cent, or 0.9 cents, to 8.1 cents, after the rural services company yesterday affirmed earnings guidance for a strong first half and satisfactory annual profit.

South Port New Zealand was unchanged at $6.50 after reiterating annual earnings guidance when reporting a 7 per cent decline in first-half profit. The port operator is hoping to provide extra services to the Tiwai Point smelter, which re-opened a fourth pot-line last year.