Fletcher helps nudge NZX 50 Index up

The NZX market may be "entering a period of consolidation" with stocks fully priced on current earnings, says Grant Williamson of Hamilton Hindin Greene.

Fletcher Challenge has helped nudge the benchmark NZX 50 Index to a small gain on a day of mixed movements among leading New Zealand stocks.

The index gained 2.991 points, or 0.1 per cent, to 4918.659 on Wednesday. Within the index, 20 stocks rose, 25 fell and five were unchanged. Turnover was $133 million.

Fletcher, the biggest company on the index, rose 2.4 per cent to $9.68, having recovered from as low as $7.95 in early May.

"There's some pretty good confidence out there in the economy," said Grant Williamson, a director at Hamilton Hindin Greene.

"We're starting to see some traction in the Christchurch rebuild and in the rural sector, now we're over the drought and soft commodity prices are staying firm."

Mainfreight, the global transport group, rose two per cent to $12 after reporting on Tuesday it was on track to lift earnings in 2014.

"There has been continued buying since they released their financials, which showed some improvement over the last few months," Mr Williamson said.

The NZX 50 reached an all-time high last week and Mr Williamson said the market may be "entering a period of consolidation" and the next rally would be led by earnings growth.

"Stocks on current earnings are really at the upper end of where they should be" in terms of valuations, he said.

Xero, the cloud-based accounting company, rose 1.9 per cent to $35.85 and Fisher & Paykel Healthcare climbed 1.3 per cent to $3.89.

Chorus, the network company, fell about two per cent to $1.97, extending its slide since the regulator confirmed it would have to cut its prices by December next year. Telecom fell 0.4 per cent to $2.325.

Mighty River Power dropped about 0.9 per cent to $2.17 and TrustPower was off 0.2 per cent to $6.64.


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Source: AAP


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