NZX 50 hits record on outlook for low interest rates

New Zealand shares rose to a record high, led by Pushpay Holdings and Scales Corp, after the Reserve Bank affirmed plans to keep interest rates low. Mercury New Zealand and Fletcher Building weakened.

The S&P/NZX 50 Index rose 17.89 points, or 0.2 per cent, to 8,637.72. Within the index, 29 stocks rose, 12 fell and nine were unchanged. Turnover was $130.5 million.

This morning, new Reserve Bank governor Adrian Orr kept the official cash rate at 1.75 per cent and said he expects to keep the OCR at "this expansionary level for a considerable period of time", and that the direction of the next move is equally balanced and could be up or down, although its forecasts continue to point to eventual rate increases. The New Zealand dollar fell.

"The market is not showing a huge amount of signs of life, although the Reserve Bank statement that interest rates aren't moving soon does make equities a good place to achieve superior income compared to term deposits," said Grant Williamson, director at Hamilton Hindin Greene.

"It has got some interest back into the market, particularly in higher yield stocks like Spark. Offshore markets are very firm too, which certainly helps."

Spark gained 1.6 per cent to $3.545, while dual-listed Australian bank stocks rallied, with Westpac Banking Corp up 2.2 per cent to $32.43 and Australia and New Zealand Banking Group rising 1.9 per cent to $30.25.

Pushpay Holdings led the index higher, up 4.9 per cent to $4.28. The company is due to report its annual results next Thursday.

"Nothing has been announced for a number of weeks so that doesn't explain the price rise today, and following their last quarterly announcement the share price actually softened somewhat," Williamson said.

Scales rose 1.9 per cent to $4.85. It will sell its cold storage businesses to newly-incorporated US cold storage chain company Emergent Cold for $151m as it shifts to a greater focus on agribusiness. The deal is subject to approval by the Overseas Investment Office.

"They touched $5 but have drifted off a little bit. They're wanting to focus more on a pure agri play which makes sense, although with that comes a bit of risk with the storms in the North Island possibly damaging crops. The market has taken that very nicely," Williamson said.

Mercury was the worst performer, down 1.5 per cent to $3.19, with Kathmandu Holdings falling 1.5 per cent to $2.61 and Meridian Energy falling 1.3 per cent to $2.945.

Fletcher Building dropped 0.8 per cent to $6.40. The stock had been gaining over the past month, recovering from the six-year low it hit at the beginning of April, after last month completing the institutional component of a $750m capital raise, generating gross proceeds of $515m. The retail component of Fletcher's capital raise opened on April 23 and closes tomorrow.