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NZ shares gain on global wave

NZ Newswire logoNZ Newswire 2/06/2017 Sophie Boot

New Zealand shares rose on Friday, led by Fletcher Building and Restaurant Brands, as global equity markets rallied.

The S&P/NZX 50 Index gained 49.07 points, or 0.7 per cent, to 7499.97. Within the index, 35 stocks rose, nine fell and six were unchanged. Turnover was $167 million.

The local index followed global bourses higher, after US markets finished stronger overnight after upbeat manufacturing and employment data.

On Friday afternoon, Japan's Nikkei 225 rose 1.9 per cent, Australia's S&P/ASX 200 gained 0.7 per cent, and Hong Kong's Hang Seng advanced 0.5 per cent.

Fletcher Building was the best performer on the local index, up 3.5 per cent to $7.73.

The shares have been weak for some time, dropping nearly a dollar over the course of May to $7.56, said Craig Stent, executive director and head of equities at Harbour Asset Management.

"There have been expectations they might have further downgrades to earnings, though those could have been priced in now," Mr Stent said. "It's possible people have become a little over-bearish in that regard."

Restaurant Brands gained 2 per cent to $6.07, a new record.

The shares reached an all-time high Thursday when the fast-food operator announced it had boosted first-quarter sales by 67 per cent to $161.2 million after expanding in Australia, Hawaii, Guam and Saipan. On a same-store basis, sales rose 7.2 per cent.

"The key driver of that is probably KFC sales, there's a bit of expectation that they will acquire further stores in Australia," Mr Stent said.

Air New Zealand was the worst performer, down 4 per cent to $2.90. On Thursday the shares hit a 16-year high of $3.02 after the airline lifted its full-year guidance to exceed $525m.

On Friday, First NZ Capital lifted its 12-month target price on Air New Zealand to $2.50 from $2.10 but lowered its rating to 'underperform' from 'neutral'.

NZX was unchanged at $1.09. The stock exchange operator's board told shareholders it doesn't support the election of Tony Falkenstein as one of its directors at its annual meeting later this month.

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