New Zealand shares rose led by Xero as it finalised its $147.2 million capital raise. Genesis Energy and Meridian Energy paced the gain as investors sought dividend paying stocks.

The NZX 50 Index rose 21.805 points, or 0.4 percent, to 5908.588. Within the index, 21 stocks rose, 17 fell and 12 were unchanged. Turnover was $121 million.

Xero advanced 5.1 percent to $25.60, its highest level since last August. The cloud-based accounting system issued 7.4 million shares to two American tech investors, Accel Partners and Matrix Capital Partners, completing its capital raise which has lifted its total cash on hand to around $285 million. News of the cash injection last month bolstered market confidence in the stock and has lifted its share price 58 percent over the past month. It has also announced former Dell executive Russell Fujioka will replace Peter Karpas as the head of its US operations, while Graham Smith will join the Xero board as an independent, non-executive director.

"It's a carry on from their recent announcement about the new investment they've had and the new management personalities they've appointed for the US part of the business," said Michael Milnes, investment advisor at Craigs Investment Partners. "The market took that really positively when it was first announced, and the only real news out today is the completion of that investment, so it is a carry on from that, as they've got a bit more money and built up the war chest for the US."

Yesterday Reserve Bank governor Graeme Wheeler kept the official cash rate at 3.5 percent and dropped future increases from the forecast track of the 90-day bank bill rate, which is seen as a proxy for the key rate. That stoked demand for income paying equities, such as utilities, property investors and telecommunication companies.

Genesis advanced 2.6 percent to $2.37. Meridian gained 1.4 percent to $2.165. MightyRiverPower rose 0.9 percent to $3.35. Spark New Zealand, formerly Telecom Corp, increased 1.3 percent to $3.235. Argosy Property rose 1.4 percent to $1.13. Precinct Properties New Zealand advanced 0.4 percent to $1.185.

"It's always a positive for equities, and particularly those stocks that pay good dividend income," Milne said. "Investors are having to look elsewhere to find income and so there has been a bit of pick up, particularly in those good quality companies that are paying a dividend and also that have the potential to grow their dividend."

Contact Energy was the worst performer on the benchmark index today, dropping 1.9 percent to $6.20. The energy generator and retailer has said it will use its spare capex to fund offshore developments, rather than return it to shareholders, as the market had been expecting.

New Zealand Oil and Gas was unchanged at 58 cents. The oil and gas explorer said acceptances under its hostile takeover offer for ASX-listed Cue Energy Resources lifted its interest in the target company to 27.3 percent, close to its target holding.

Metro Performance Glass, the glass manufacturer, advanced 4.6 percent to $1.81. Fletcher Building, the construction and building supplies firm, fell 0.1 percent to $8.83.

On the New Zealand Alternative Index, Windflow Technology was unchanged at 6 cents. The unprofitable wind turbine manufacturer narrowed its first-half loss to $2.3 million in the six months ended Dec. 31, from and earlier loss of $2.8 million but says it will need to borrow from its shareholders and find new financing to remain a going concern.