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NZ shares join global Trump rally

NZ Newswire logoNZ Newswire 2/03/2017 Paul McBeth
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New Zealand shares rose on Thursday, joining a global rally as US President Donald Trump's proposed US$1 trillion of infrastructure spending and aspirations to drive American economic growth stoked investor optimism.

Summerset Holdings and Metlifecare gained in the wake of better earnings results in a lacklustre reporting season.

The S&P/NZX 50 index gained 27.05 points, or 0.4 per cent, to 7175.83. Within the index, 36 stocks gained, nine fell, and five were unchanged. Turnover was $115.9 million.

Stocks markets across Asia followed Wall Street higher after Mr Trump's speech to the Joint Session of Congress dialled back the overblown rhetoric of the campaign that's dogged his early appearances, even if it didn't provide much more detail on his planned infrastructure and tax packages.

Australia's S&P/ASX 200 Index was up 1.1 per cent in afternoon trading and South Korea's Kospi 200 gained 0.8 per cent.

"New Zealand does appear to be lagging behind," said Grant Williamson, a director at Christchurch-based Hamilton Hindin Greene. "Investors are starting to see there's a large number of stocks that are fully-priced on the earnings they reported and it's getting more difficult for investors to find value in this market."

Mr Williamson said retirement village operators Metlifecare and Summerset were two of the better performers on the day, and also stood out with stronger-than-expected earnings during the reporting season.

Summerset rose 1.9 per cent to $5.40 and Metlifecare gained 1.7 per cent to $6.05.

"Those two reported earnings above expectations," he said. "Both Metlifecare and Summerset learned a valuable lesson off Ryman a number of years ago that there are very good margins in development."

Comvita led the market higher, up 3 per cent to $7.49, while Trade Me Group was up 1.9 per cent to $5.34.

Warehouse Group posted the biggest fall on the day, down 2.7 per cent to $2.55. The country's biggest listed retailer is set to report first-half earnings next week, having recently announced plans to strip up to $20 million of annual spending in an organisation restructure.

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