Yield hungry investors drive stocks up 1.3pc

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New Zealand stocks rose yesterday as yield-hungry investors helped the exchange to sidestep the broad selloff on Asian markets and the downgrade of New Zealand's credit rating by Standard & Poor's and Fitch Ratings. Pumpkin Patch led gainers and Goodman Fielder fell.

The NZX 50 Index rose 43.18 points, or 1.3 per cent, to 3343.35, with a turnover of $126.5 million bolstered by traders squaring their books at the end of the quarter.

"When you start looking around at alternatives there are still some reasonable yields in our market, and in the short term rates still look like they're on hold for a while longer," said Alan Moore, an executive director at Milford Asset Management. "The two downgrades normally would have been received far more negatively than they have been."

Pumpkin Patch, the children's clothing chain, rose 5.1 per cent to 82c, recovering some of the ground it lost this week after reporting a $1.8 million annual loss.

Cavalier rose 4.9 per cent to $3.20.

AMP, the Australian wealth manager, rose 4.4 per cent to $4.97. The company's New Zealand investment arm has agreed to sell the management contract for Property For Industry to Auckland-based DPF Management.

PFI shares fell 0.9 per cent to $1.15.

Telecom rose 3.5 per cent to $2.64.

Port of Tauranga, the country's biggest export hub, rose 3.3 per cent to $9.81 after it announced that the world's second biggest shipping line will double the frequency of its Oceana Express Service to a weekly basis following positive feedback from customers.

Fletcher Building rose 2.9 per cent to $7.75.

Goodman Fielder fell 14.7 per cent to 60c as the stock resumed trading following the completion of the institutional component of its 5 for 12 pro-rata share offer.