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Shares gain as investors 'buy the rumour'

NZ NewswireNZ Newswire 29/07/2016 Sophie Boot

The final day of trading experienced what one commentator descibed as a bit of "buy the rumour", as stocks were bought up ahead of reporting season. © Hagen Hopkins/Getty Images The final day of trading experienced what one commentator descibed as a bit of "buy the rumour", as stocks were bought up ahead of reporting season. New Zealand shares rose to a fresh record, led by Comvita and Fletcher Building.

The S&P/NZX 50 Index rose 49.26 points, or 0.7 per cent, to 7,355.61. Within the index, 26 stocks rose, 16 fell and nine were unchanged. Turnover was $164 million.

James Smalley, director at Hamilton Hindin Greene, said there was a bit of "buy the rumour" happening in the market, with stocks bought up ahead of reporting season.

"It appears the market does have a reasonable amount of momentum heading into reporting season, and some shares prices are starting to look stretched on the fundamentals," Smalley said.

Comvita led the index again, up 4.6 per cent to $11.27. The stock has gained 28 per cent this year but dropped to a three-month low of $10.35 on Tuesday.

Fletcher Building gained 2.4 per cent to $9.69, a price not seen since April 2014. It's advanced 29 per cent this year as expectations of residential construction, particularly in Auckland, have increased.

Fletcher also announced it paid $12 million below the flagged purchase price to buy rival construction company Higgins Group Holdings after dropping Horokiwi Quarries from its application to reduce its dominance in the aggregates market.

Auckland International Airport rose 2 per cent to $7.38, an all-time high.

Trading for the first time under its new name, Mercury New Zealand rose 1.3 per cent to $3.13. Formerly known as Mighty River Power, the company has combined its generation arm and its retail arm, Mercury Energy, into one and has a new NZX ticker: MCY.

Genesis Energy advanced 1.8 per cent to $2.22 while Spark New Zealand gained 1.7 per cent to $3.945. New Zealand Oil & Gas gained 2.2 per cent to close at 46 cents after a relatively positive quarterly production and cashflow update.

NZX fell 1 per cent to $1.02, as did Trade Me Group at $5.12, while Fisher & Paykel Healthcare fell 0.9 per cent to $10.50.

Outside the main index, Moa Breweries' chairman Ashley Waugh assured shareholders at the annual meeting that the company has no "specific plans for corporate activity to talk about", harking back to a 'please explain' notice on July 13 following a 47.5 per cent jump in the share price to 87 cents. The shares were trading up slightly at 90 cents today.

Veritas Investments was unchanged at 43 cents,

OceanaGold dropped 0.6 per cent to $5.05.

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