NZX leads market lower as inflation figures loom

Stock market operator NZX led the S&P/NZX 50 index lower as investors pondered whether inflation data tomorrow would slow the central bank’s aggressive rate hike cycle.

Tuesday, January 24th 2023, 6:14PM

by BusinessDesk

The benchmark index slipped 15.8 points, or 0.1%, to 11,932.92. Across the main board, 61 stocks fell, 70 rose and 53 were unchanged. Turnover was $110.6 million.

NZX fell 2.3% to $1.27 as the local stock market dipped into negative territory late in the trading session, ignoring a strong lead from the US where tech stocks helped boost the Nasdaq and in Australia where energy and mining stocks were buoyed.

That comes ahead of the December quarter consumer price index tomorrow, which is expected to show a slowing annual pace of inflation. Still, analysts remain unsure whether that will slow the Reserve Bank’s aggressive hiking policy that is set to lift the official cash rate to 5.5% by the September quarter of this year.

The kiwi dollar was unchanged at 64.90 US cents at 3pm in Wellington from yesterday, but was weaker against its Australian counterpart, falling to 92.26 Australian cents from 92.89 cents.

Exporters were among other stocks pacing the decline on the benchmark index. Pacific Edge fell 2% to 92 cents and Fisher & Paykel Holdings declined 0.6% to $25.20.

Ryman rose 5.7% to $6.10 on a larger volume than usual of 2.7 million shares, clawing back some of its losses over the past 12 months as investors started questioning its level of debt. A slowing housing market has also weighed on the retirement village operator and developer.

“Ryman has been long overdue a recovery – it was a bit oversold down below $6,” said Grant Davies, an investment adviser at Hamilton Hindin Greene.

Davies said tomorrow’s inflation data continue to hang over Ryman and other retirement village operators.

“That’s going to have a big bearing on interest rates and that’s the main thing pulling these property stocks,” he said.

Summerset Group rose 2% to $9.89 and Arvida Group advanced 1.8% to $1.14.

Serko extended its rally after yesterday’s upgraded outlook, rising 6.7% to $2.40. The travel software developer’s price target was upgraded by Citi on the news, and followed a tech rally on the US Nasdaq overnight.

Davies said the company was also benefiting from the revival of international tourism, which was recovering faster than some had predicted when NZ reopened its borders last year.

Auckland International Airport figures showed international passenger numbers in resort town Queenstown were back above pre-covid levels. The airport operator declined 0.5% to $8.41, while rental campervan operator Tourism Holdings rose 0.8% to $3.73.

National carrier Air NZ was unchanged at 79.5 cents after saying it would add another weekly flight to Shanghai as China relaxed its borders.

Kiwi Property Group increased 0.5% to 92.5 cents after saying its shopping centres enjoyed strong custom through 2022. The Warehouse Group increased 0.4% to $2.61 while Briscoe Group declined 1.7% to $4.60.

AFT Pharmaceuticals rose 2.4% to $3.80 after agreeing a licensing and distribution deal for nine countries in eastern Europe.

Contract labour and recruitment firm Accordant Group dropped 4% to $1.70 in very light trading after saying it would buy executive search firm Hobson Leavy for an undisclosed sum.

Auckland Real Estate Trust was unchanged at 93 cents after it announced plans to delist.

Tags: Market Close