NZX50 slips as traders await cental banks' decisions

A hesitant New Zealand sharemarket fell nearly half a percent as it waited for the latest interest rate decisions from the central banks on each side of the Tasman.

Monday, April 3rd 2023, 6:43PM

by BusinessDesk

The S&P/NZX 50 Index reached an intraday low of 11,795.8 points before recovering slightly in the last half hour matching session, and closed at 11,838.79, down 45.7 points or 0.38%.

There were 72 gainers and 63 decliners on the main board, on steady volume of 29.67 million share transactions worth $104.52m.

Jeremy Sullivan, investment advisor with Hamilton Hindin Greene, said it was disappointing to see the market fall after a strong Friday in the United States.

“But people are sitting on their hands pending the outcomes of the monetary policy review meetings in Australia and New Zealand this week. All eyes will be on the commentary and economic outlook accompanying both Reserve Bank decisions.”

The Reserve Bank of Australia is meeting on Tuesday and may even put interest rate rises on hold. The NZ Reserve Bank follows on Wednesday and is expected to increase the official cash rate 50 basis points to 5%.

Sullivan said the “Australian bank is not as hawkish as ours. The NZ bank has a bit to digest, especially the impact of Cyclone Gabrielle, and our inflation is still red hot. There is uncertainty over whether the bank will give credence to slowing the rate of increase.”

Oil price rises

Another added inflationary pressure is the sudden rise in oil prices, he said.

Saudi Arabia, Iraq and several Gulf states are cutting oil production by more than one million barrels a day to boost prices amid fears of weaker demand.

Crude oil jumped 7% to US$81.74 (NZ$131.56) a barrel, up from $75.38, and settled at $79.71 at 5pm NZ time.

On Wall Street, the major indices ended the week with a three-day rally. The Dow Jones Industrial Average was up 1.26% to 33,274.15 points; S&P 500 gained 1.44% to 4109.31; and Nasdaq Composite increased 1.74% 12,221.91.

The markets had a boost after the Federal Reserve’s inflation gauge showed a cooler-than-expected increase in prices. The core Personal Consumption Expenditures index, which excludes energy and food costs, rose 0.3% in February, less than the 0.4% expected by economists.

The S&P 500 and Nasdaq were up 7.03% and 16.77% respectively for the first quarter. It was the best quarter since 2020 for the tech-heavy Nasdaq.

At home, leading utility stocks dipped on the fear that interest rates will rise.

Contact Energy was down 10c to $7.64; Meridian declined 12c or 2.29% to $5.13; Vector shed 8c or 1.98% to $3.97; Manawa decreased 7c to $4.90; and Infratil was down 15c to $9.05.

Fisher and Paykel Healthcare declined 11c to $26.54; Ebos Group was down $1 or 2.15% to $45.50; Skellerup Holdings fell 28c or 5.35% to $4.95; Restaurant Brands shed 22c or 3.27% to $6.50; Comvita decreased 12c or 3.81% to $3.03; and Scales Corp was down 7c or 2.16% to $3.17.

Retailers The Warehouse Group increased 4c or 2.16% to $1.89; Briscoe Group rose 21c or 4.6% to $4.78; and Michael Hill gained 2c or 1.89% to $1.08.

Channel Infrastructure declined 4c or 2.65% to $1.47 after telling the market that its chief financial officer, Jarek Dobrowolski, has resigned and will be leaving during June.

Other decliners were T&G Global, down 4c or 1.9% to $2.06; Vista Group, shedding 6c or 4.32% to $1.33; Task Group falling 2.5c or 7.58% to 30.5c; and Serko decreasing 9c or 3.77% to $2.30.

Pushpay Holdings, up 1c to $1.40, is holding its shareholder meeting on April 27 to vote on the improved takeover offer of $1.42 a share from investment firms Sixth Street and BGH Capital. The increase of 8c a share is likely to be approved.

Foley Wines was up 2c to $1.34 following the resignation of founder Bill Foley as director and chair. He will be replaced as chairman by Paul Brock, and son Robert Foley becomes a director. Billionaire Bill Foley is concentrating on his new investment after buying English premier league soccer club AFC Bournemouth.

Other gainers were Auckland International Airport up 8c to $8.78; Air NZ increasing 1.5c or 1.96% to 78c; Freightways improving 14c to $9.59; Ryman Healthcare adding 12c or 2.29% to $5.37; Gentrack rising 13c or 4.61% to $2.915; and Radius Residential Care up 1.5c or 6.38% to 25c.

Ventia Services increased 7c or 2.53% to $2.84; Heartland Group added 4c or 2.56% to $1.60; Arvida Group was up 3c or 3.23% to 96c; NZ King Salmon Investments gained 1c or 4.88% to 21.5c; and TradeWindow improved 1.5c or 4.48% to 35c.

Tags: Market Close