Shares stage late rally after OCR cut
The S&P/NZX 50 Index increased 35.66 points, or 0.4 percent, to 10,063.05. Within the index, 30 stocks rose, 14 fell and six were unchanged. Turnover was $153.2 million.
The benchmark index had been in the red through much of the session, as Asian equity markets followed dour trading in New York amid heightened fears about US-China trade relations. However, the Reserve Bank's decision to cut the OCR to a record low 1.5 percent, making dividend yields more attractive than fixed-interest returns and lowering finance costs for corporates, spurred a rally in late trading.
Companies paying reliable dividends were among those most in vogue. Contact was up 3.8 percent at $7.14 on a volume of 1.3 million shares, while Mercury NZ rose 2.6 percent to $3.93 on 712,000 shares.
"The RBNZ cut rates, which was a bit of a surprise in choosing not to follow the lead of the Federal Reserve and RBA," said Greg Smith, head of research at Fat Prophets.
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