Elsewhere in the energy sector, Genesis decreased 7c or 2.83% to $2.40 and Vector shed 9c or 1.91% to $4.62.
Shane Solly, portfolio manager with Harbour Asset Management, said investors were selling other stocks to recycle into Contact and Meridian.
“This put large caps such as Fisher & Paykel [down 17c to $48.61] and Auckland International Airport [down 10c to $8.17] under pressure, with rotation going on.
“Fisher & Paykel was a bit of a surprise as healthcare was the best sector overnight on the US market – the sector is now at an all-time high,” Solly said.
The BNZ-BusinessNZ Performance of Manufacturing Index increased 3.2 points to 56.5 in September, up from 53.3 in the previous month – the 15th consecutive month of expansion and well above the long-term average of 52.5.
Employment also picked up, now back in expansion at 51.8, which is an encouraging sign that firms are perhaps starting to feel more confident about adding staff, BusinessNZ said.
Solly said the manufacturing industry is showing good signs of life and a part of the economy is firing.
“Domestic consumption is still flat, with consumers feeling cautious and wary of the rising cost of living. Retail card spending was down 0.4% in September, but food prices were unchanged and up 2.4% for the year.”
Solly said the improving economic data was helping the beaten-down cyclical stocks.
Mainfreight was up a further 98c to $68.38; Summerset gained 15c or 2.22% to $6.90; and Ryman Healthcare added 4c or 2.23% to $1.83.
In the United States, the Dow Jones Industrial Average jumped to a one-month high after gaining 1.08% to 52,177.69 as investors moved into blue-chip financial, healthcare and consumer stocks.
The US 10 Year Treasury Note yield was down to 5.09% despite a second straight hotter-than-expected US inflation report.
The September producer price index rose 1.3% month-on-month, against a forecast of 0.5%, and 6.3% year-on-year. It was the biggest monthly increase in four and a half years.
The oil price remained elevated at US$105.40 ($186.53) a barrel, with the International Energy Agency announcing an immediate release of 100 million barrels from emergency reserves, providing a potential offset to supply concerns.
Asian-Pacific markets went the opposite direction to New Zealand, with the Japanese Nikkei 225 up 1.8%, the South Korean Kospi increasing 3.61% and the Hong Kong Hang Seng gaining 1.21% at 5.45pm NZ time.
Across the Tasman, the S&P/ASX 200 Index was up 1.1% to 8815.2 points.
Back home, SkyCity was up 2c or 3.03% to 68c after signing a conditional deal to sell the Grand Hotel and its business assets opposite the casino in Auckland to private investment firms Eden Global Capital Private and Auckland City Collective for $221m.
Settlement is expected mid-December, and it takes SkyCity’s asset sales to $295.5m, including the $74.5m sale of its Albert St office tower and neighbouring Victoria St properties.
Solly said the price for the Grand Hotel sale was better than the market expected and the question now is whether SkyCity has done enough to have a cleaner balance sheet.
“The management has done the right thing, and the next step is turning minds to resuming a dividend.”
Fletcher Building was down 8c or 2.44% to $3.20; Chorus decreased 19c or 2.26% to $8.21; Vital Healthcare Property Trust shed 3.5c or 1.91% to $1.80; and Winton Land was down 2c or 1.72% to $1.14.
Hallenstein Glasson added 20c to $15.12; Gentrack increased 9c or 2.23% to $4.12; Vulcan Steel gained 16c or 2.44% to $6.73; and Comvita collected 2c or 2.53% to 81c.
Synlait Milk was up 1.5c or 3.33% to 46.5c; Bremworth gained 2c or 3.17% to 65c; ikeGPS increased 3c or 3% to $1.03; and General Capital rose 3.5c or 13.73% to 29c.
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