NZ shares flat as investors wait for job data

New Zealand shares finished the day little changed after being caught up in a global sell-off yesterday when traders interpreted the US Federal Reserve’s meeting minutes as being hawkish.

Friday, January 7th 2022, 8:49PM

by BusinessDesk

The S&P/NZX 50 Index fell 12 points, or 0.1%, to 12,970.65. Turnover was $112 million.

Local markets again took their cue from the US which was relatively flat overnight with investors waiting to see employment data scheduled for release on Friday night.

The Federal Reserve’s meeting minutes highlighted the tight labour market as one reason it may need to raise rates more quickly than it had previously planned.

While the information contained within the minutes was not much different to what the central bank has said previously, markets still reacted as if it were more hawkish.

Traders will now be watching to see if the non-farm payrolls employment data release puts even more pressure on the policymakers to hike interest rates.

Jeffrey Halley, a market analyst at Oanda, said market nerves will ease if the data shows less than 400,000 new jobs were added to the economy, while a number over 500,000 will have the opposite result.

“The meltdown overnight is more about positioning than anything, because when you look at what the Fed members said in the minutes, it wasn’t really anything different than what we already knew,” he said.

Bitcoin has fallen more than US$5,000 in recent days, with most of that plunge happening on Thursday evening as it followed other risk assets lower.

Cinema software company Vista Group led the market lower, having already had one of the weaker performances yesterday.

The stock had been trading close to $2.60 throughout November but lost some ground during December and today dropped another 2.6% to $2.26.

A motley crew of other stocks followed behind Vista: Infratil fell 2.1% to $8.11, Sanford dropped 2% to $4.86, and Serko declined 1.5% to $6.70.

Mercury NZ had the day’s biggest gain, up 3.4% at $6.36, while Pacific Edge gained 2.3% at $1.32.

AFT Pharmaceuticals was up 1.1% at $4.51 after it said in a letter to shareholders it was preparing to push its Maxigesic products in the US after the regulator responds to its tablet application later this month.

The company has left its guidance for an operating profit in the year ending March 2022, $18m to $23m, unchanged.

The Motor Industry Association reported more cars were sold last month than any other December, spiking 44.3% year-on-year to 12,097 vehicles.

The pre-owned market kept pace, up 7.7% to 121,860 units overall breaking a three-year trend of declining used car sales.

The operator of 2CheapCars, NZ Automotive Investments, rose 1.1% to 93 cents, while Turners Automotive Group and The Colonial Motor Company each rose 0.2% to $4.59 and $10.80, respectively.

Air New Zealand shares climbed 0.7% to $1.52. The airline is expected to raise more than a billion dollars of capital in the next three months, and many analysts think the stock is overpriced.

The kiwi dollar took another step lower and was trading at 67.45 US cents at 3pm in Wellington, down from 67.90 cents yesterday.

Currency exchange OFX said in a note the US dollar was in demand due to growing expectations the Federal Reserve will tighten monetary policy faster to control inflation.

The kiwi has previously found support at 67 US cents but that level could be tested if the US employment data looks strong when released Friday night.

“Leading indicators suggest the labour market continues to recover the impacts of the delta variant, with analyst pricing in a robust uptick in jobs growth through December,” OFX said.

Tags: Market Close