NZ shares bounce back from sell-off

Most New Zealand shares bounced back from a surprise sell-off yesterday, which wiped out the month's gains, as investors were encouraged by earnings results from US tech firms.

Friday, January 29th 2021, 6:11PM

by BusinessDesk

The S&P/NZX 50 Index rose 40.83 points, or 0.3 percent, to 13,127.29. Within the index, 34 stocks rose, 14 fell and two were unchanged. Turnover was $158.1 million.

Shares in both NZ and the US recorded some recovery today after Wall Street investors were forced to sell some stocks on Wednesday to cover short positions in GameStop.

Chris Smith, general manager of CMC Markets, said the retail trading frenzy had overshadowed generally positive news as tech stocks reported solid earnings and the US Federal Reserve held its accommodating policy settings.

“What we saw on Wednesday was a forced liquidation event and we’ve seen a bounce back today,” he said.

Technology stocks led the local market higher. Pushpay Holdings rose 4.4 percent to $1.65 and Vista Group International climbed 4.2 percent to $1.49.

Auckland International Airport was up 3.9 percent at $7.45, while Air New Zealand was unchanged at $1.59.

Infrastructure investor Infratil posted the day’s biggest loss, plunging 6 percent to $7.20.

Yesterday, one of its major assets, Trustpower announced it was looking to sell the retail arm of its business. The energy firm’s stock fell 0.3 percent to $8.70 today.

Meridian Energy declined 0.8 percent to $7.15. Analysts at Forsyth Barr today reiterated their underperform rating valuing the stock at $5.55 per share. Contact Energy fell further, dropping 2.2 percent to $8.17.

The top-50 index has gained just 0.1 percent during January, as these two renewable energy stocks have pulled back from massive gains during the holiday period.

In currency markets, the New Zealand dollar also bounced back but enthusiasm waned throughout the day and the dollar ended little changed.

The kiwi dollar was trading at 71.56 US cents as of 5pm in Wellington, up from 71.37 cents yesterday.

The trade-weighted index was at 74.34, from 74.21 yesterday. The kiwi traded at 93.58 Australian cents from 93.55 cents, 74.75 yen from 74.47 yen, 59.15 euro cents from 59.02 cents, 52.22 British pence from 52.21 pence, and 4.6222 Chinese yuan from 4.6236 yuan.

Tags: Market Close