Ebos Group leads market higher in rally sparked by positive US inflation data

Ebos Group led New Zealand’s benchmark index higher on Friday, a day in which it was buoyed by weaker-then-expected inflation figures out of the United States.

Friday, November 11th 2022, 6:00PM

by BusinessDesk

The S&P/NZX 50 index increased 219.83 points, or 1.98%, to 11,311.750.

Across the main board, 111 shares rose and 23 fell. Turnover was $148.5 million.

Medical supplies and animal healthcare company Ebos Group led the top 50 higher, closing up nearly 8% to $40.44.

The company was admitted into the MSCI small cap index, which is likely to trigger a raft of passive buying, Brad Gordon, director, and senior investment adviser at Hobson Wealth Partners told BusinessDesk.

Outside the top 50, NZ King Salmon jumped nearly 18%, or 4c, to 26.5c after it came off a trading halt where it announced it had received resource consent to begin farming the first open ocean finfish site in the Cook Strait.

Acting chief executive Graeme Tregidga described it as a significant decision for NZ’s aquaculture sector.

Other increases included Pacific Edge up 6.8% to 47c.

My Food Bag jumped 5.2% to 60c after it announced Mark Winter would remain on as chief executive, having been acting CEO since Kevin Bowler left last month.

Eroad ended the day up 5% to $1.47.

Property companies were among the rises, with Precinct Properties up 4.1% to $1.26 and Argosy Property increasing 3.8% to $1.21.

Investore Property was also 3.4% up to $1.50.

The NZ market followed the lead of US markets, which rallied overnight (NZ time) after inflation figures came in lower than expected at 7.7%, below forecasts of 8%.

The S&P500 ended the day up 5.5% and the Nasdaq jumped 7.3%.

In NZ, out of just a few decliners, Synlait Milk was down 2.8% to $3.05.

Power companies fell, with Genesis Energy down 1% to $2.72, Manawa Energy down 1% to $5.05, and Mercury NZ down 0.6% to $5.34.

Cannabis companies were also among the decliners, with Rua Bioscience down 4% to 23c and Greenfern Industries down 1.9% to 10.2c.

The rally was also felt in currency markets with the NZ dollar trading at 60.05 US cents at 3pm in Wellington, up from 58.89 cents yesterday.

The trade weighted index was at 70.89 up from 70.24. The last time the Kiwi broke over 60c was in mid-September.

A note from currency trader OFX said the question now was could those gains be sustained.

The scale of the move emphasised where short positions were concentrated and suggested a further depreciation in the broader US dollar outlook would support ongoing and outsized NZ dollar upside.

“Up nearly 2% overnight, the NZD will now look to consolidate a break above US$0.60. Attentions now turn to domestic manufacturing PMI data and US consumer sentiment for direction into the weekly close,” they wrote.

Tags: Market Close