MARKET CLOSE: Shares rise, led by Skellerup, Meridian

New Zealand shares rose, led by Skellerup Holdings and paced by Meridian Energy, as investors returned to equities in the face of globally low interest rates. Kathmandu Holdings gained ahead of reporting earnings tomorrow.

The NZX 50 Index rose 12.741 points, or 0.2 percent, to 5859.404. Within the index, 19 stocks rose, 25 fell and six were unchanged. Turnover was $184 million.

Overnight, Wall Street rose after the Federal Open Market Committee lowered its outlook for growth, inflation and interest rates, offsetting the impact of removing the key word 'patient' from its statement which signals it is prepared to raise rates based on future economic data. The more dovish statement prompted investors to seek yield paying equities in the face of lower interest rates for longer. Markets across the region followed suit, across the Tasman the S&P/ASX 200 rose 1.8 percent in afternoon trading, while Hong Kong's Hang Seng advanced 1.3 percent.

Skellerup, the industrial chemicals firm, climbed 3.7 percent to $1.40. Meridian, the partially privatised energy company, advanced 2.5 percent to $2.075. MightyRiverPower, the government controlled power firm, rose 1.3 percent to $3.21. Fletcher Building, the construction and building supplies firm, rose 0.7 percent to $8.93.

"The market is firmer that is mainly on the back of offshore strength," said Grant Williamson, director of Hamilton Hindin Greene. "Investor enthusiasm has come back into the market. A lot has to do with the focus on interest rates and where they're going to go in the median term."

Kathmandu advanced 1.2 percent to $1.76 rising for the eight consecutive day. The outdoor goods retailer plunged to a two-and-a-half year low last month when it said Christmas and January trading lagged behind expectations, resulting in a first-half loss. It flagged a first-half loss of between $1 million and $2 million in the 26 weeks ended Jan. 25, compared with a profit of $11.4 million in the same period a year earlier and is due to report its financials this Friday.

"Investors consider it to be oversold, so the bargain hunters have been in the market for a wee while now," Williamson said. "A number of them will be looking to buy on this weakness expecting the company to turnaround their performance."

Mainfreight fell 1.4 percent to $15.94. The courier and logistics company expects annual profit to rise as much as 7.1 percent on revenues in excess of $2 billion.

Outside the benchmark index, Tourism Holdings rose 0.6 percent to $1.75. The largest campervan rental business in Australia and New Zealand said it acquired 49 percent of UK-based Just Go, a motorhome rentals and sales business.

(BusinessDesk)