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NZ shares jump as RBNZ keeps rates low

NZ Newswire logoNZ Newswire 11/05/2017 Rebecca Howard

NZX signage  in Wellington.  (File photo) © Hagen Hopkins/Getty Images NZX signage in Wellington. (File photo) New Zealand shares pushed higher on Thursday after the central bank held interest rates at a record low and unexpectedly kept its forecast rate track unchanged.

This stoked demand for dividend-paying stocks including property firms and power companies.

Xero led gains after it crept closer to profitability.

The S&P/NZX 50 added 66 points or 0.9 per cent to 7489.710. Within the index, 38 stocks rose, four were unchanged and eight fell. Turnover was $180 million.

High-dividend paying shares fared well after the Reserve Bank kept its view that interest rates won't move until 2019, maintaining the attraction of high yielding stocks, such as electricity generator-retailers.

Genesis Energy added 2.7 per cent to $2.27 and Contact Energy was up 1 per cent at $5.26.

"It was a strong day on the local market after the Reserve Bank kept rates unchanged. That's given heart to this market that just does not want to lie down," said Hamilton Hindin Greene Broker Grant Williamson.

Property companies with steady dividends also fared well.

Investore Property rose 1.5 per cent to $1.33, Precinct Properties gained 0.8 per cent to $1.21 and Vital Healthcare Property Trust increased 2.5 per cent to $2.275.

Xero led the benchmark index higher, rising 5.3 per cent to $23 after the company said its net loss was $69.1 million, narrower than the $82.5m reported in the prior period.

Z Energy added 0.8 per cent to $7.89 after it more than tripled its annual profit after acquiring Chevron NZ's Caltex and Challenge! brands.

A2 Milk also helped bolster the index, adding 3.5 per cent to $3.80, as investors continue to be cheered about its prospects in China, said Mr Williamson. "It's in a major uptrend," he said.

In the other direction, the biggest loser was Sky Network Television, which shed 1.9 per cent to $3.66.

Some profit taking in Heartland Bank weighed on the index as it ended down 1.7 per cent at $1.78. The stock rose sharply earlier in the week on news that the Australian-owned banks faced new deposit levies across the Tasman.

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