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NZ shares extend gain with bargains galore

NZ Newswire logoNZ Newswire 20/09/2016 Sophie Boot

New Zealand shares rose for a third session as investors continued to seek out cheap-looking stocks, with Comvita, Meridian Energy and Auckland International Airport leading the index higher.

The S&P/NZX 50 Index gained 30.32 points, or 0.4 per cent, to 7,308.44. Within the index, 24 stocks rose, 20 fell and six were unchanged. Turnover was $141.9 million.

"We've had a bit of a rally and that really comes after the fall we've experienced in the last week - there's a little bit of bargain hunting," said Daniel Metcalfe, senior investment adviser at OMF.

Even after the recent selling, New Zealand's benchmark index is up 15 per cent this year, having hit a record close of 7,571 earlier this month, and Metcalfe said he thought the NZX 50 would push back up to those highs.

"The NZX 50 can easily get back up to its previous record from September once people come to realise that rates here are still going lower and the US are not going to raise rates in a hurry, they'll be pushed back into equities again - very much buy the dips," Metcalfe said.

Comvita led the index, up 3.1 per cent to $11.50.

Stocks which were sold off heavily last week continued to recover today, with Meridian Energy gaining 2.8 per cent to $2.90, Auckland International Airport up 2.2 per cent to $7.05, and Genesis Energy advancing 1.6 per cent to $2.255.

"Those stocks came under pressure quite quickly because overseas and local funds are big holders, and if you think the kiwi dollar's going to start correcting because of high US interest rates, those are the ones that go out the door," Metcalfe said.

Apple exporter Scales Corp was the worst performer, down 3 per cent to $3.20, and Orion Health Group fell 2.6 per cent to $3.80. The strong New Zealand dollar is hurting export stocks, Metcalfe said.

A2 Milk Co fell 2 per cent to $1.91 and Tower dropped 1.5 per cent to 97.5 cents.

Outside the benchmark index, Arvida Group gained 3.4 per cent to $1.23.

Seadragon was unchanged at 0.9 of a cent. The fish oil refiner has raised the minimum $250,000 it sought in a rights issue launched this month and has extended the offer until Oct 10.

NZAX-listed GeoOp was unchanged at 19.5 cents.

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