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Shares up on interest rate cut speculation

NZ NewswireNZ Newswire 1/07/2016 Sophie Boot
A representative picture of rising shares and stock prices. © Getty Images A representative picture of rising shares and stock prices.

New Zealand shares rose along with global markets as speculation about interest rate cuts stoked demand for equities, with Kathmandu Holdings, Property for Industry and Auckland International Airport gaining.

The S&P NZX 50 Index gained 0.4 per cent, to 6,926.23. Within the index, 23 stocks rose, 23 fell and four were unchanged. Turnover was $163.8 million

The index has gained 3.9 per cent this week, rising every day after being sold off heavily last Friday following the UK's vote to leave the European Union.

Markets across the globe strengthened overnight and Asia traded higher on Friday afternoon. Hong Kong's Hang Seng rose 1.8 per cent, Japan's Nikkei 225 gained 0.5 per cent, and Australia's S&P/ASX 200 increased 0.2 per cent ahead of Saturday's national election.

"It's been another very good day on the back of offshore markets again firming up, concerns over the British exit don't seem to exist right at the moment - or maybe it's more a reaction to interest rates around the world are going to go lower, and that's good for equities," said Hamilton Hindin Greene's Grant Williamson.

"There hasn't been much in the way of stock specific news, the spotlight will be on Australia this weekend - dare I say the decision looks like an easy one this time, although I think we all thought that last week with the British vote."

Kathmandu was the best performer, up 3.9 per cent to $1.59. It advanced 15 per cent yesterday after raising its forecast for annual earnings as the outdoor equipment chain boosts margins from new products, better management of promotional activity and cost savings.

Property for Industry gained 3.2 per cent to $1.62, Auckland Airport rose 2.3 per cent to $6.65, and Summerset Group advanced 2.3 per cent to $4.48.

Xero was the worst performer, down 1.9 per cent to $17.85.

Vital Healthcare Property Trust dropped 1.8 per cent to $2.19, Ebos Group fell 1.6 per cent to $16.10 and Trade Me Group declined 1.3 per cent to $4.57.

The benchmark index will see a new constituent next week, with Stride Property's wholly-owned subsidiary, Investore Property, joining the S&P/NZX 50 Index on Wednesday.

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