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NZ shares gain after sell-off

NZ NewswireNZ Newswire 19/09/2016 Sophie Boot

New Zealand shares rose as some investors rummaged for bargains left over from last week's sell-off, with decisions on interest rates in the United States and Japan expected to dominate trading this week.

Stride Property, A2 Milk Co, and NZX led the index.

The S&P/NZX 50 Index rose 27.6 points, or 0.4 per cent, to 7,278.12. Within the index, 24 stocks fell, 21 rose and five were unchanged. Turnover was $111.3 million.

The local bourse dropped back nearly 3 per cent over the course of last week as investors took their lead from a Wall Street share slump driven by growing expectations that the Federal Reserve would resume hiking interest rates. The Fed's announcement is due Thursday morning local time, the same day New Zealand's Reserve Bank will review its cash rate.

"Everyone's looking to the policy meetings overseas, that's where the volatility has come from recently," Robert Garden, investment adviser at Craigs Investment Partners, said.

Property stocks which were sold off last week gained on Monday, with Stride Property leading the index, up 3.1 per cent to $2.01, and Kiwi Property Group rose 1.7 per cent to $1.49.

"Any rate rises are going to be gradual and we're not going to be making any moves here," Mr Garden said "So there are some investors thinking that they look like reasonable buying after that pullback last week. With what's on the horizon, I think we're going to see continued volatility until the end of the year, driven by news from overseas."

A2 Milk advanced 2.6 per cent to $1.95 while NZX gained 1.9 per cent to $1.08.

Tegel Group Holdings was the worst performer, down 2.9 per cent to $1.68.

Outside the main index, Briscoe Group rose 1 per cent to $3.87. The homewares retailer lifted first-half profit by 33 per cent and hiked its interim dividend after widening gross margins with more rigorous inventory management and boosting sales.

Synlait Milk was unchanged at $3.62. The NZX-listed dairy company tripled annualnet profit although it warned growth in the coming year would be more modest as new Chinese regulations disrupt infant formula sales.

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