NZ sharemarket subdued as the bulls charge on Wall Street

The New Zealand sharemarket continued a steady-as-she-goes course on quiet trading, while a buoyant Wall Street is having a jolly good time.

Thursday, July 20th 2023, 6:30PM

by BusinessDesk

The S&P/NZX 50 Index closed flat for the third successive day, gaining 12.43 points or 0.1% to 11,932.1. After a morning fall, the index bounced back at lunchtime and traded steadily during the afternoon.

There was an even mix of 67 gainers and 64 decliners over the whole market, with 22.96 million shares worth $95.3m changing hands.

Mark Lister, investment director with Craigs Investment Partners, said the local market is in a lull with all the latest economic and inflation data behind it and little corporate news till next month’s reporting season.

“There’s plenty of action happening overseas. We are more subdued than the United States because we don’t have their technology stocks but there is a flow-on effect,” said Lister.

“While sentiment has improved, investors are reluctant to take any big positions until they see how the balance of the year plays out, including the general election and controlling inflation.

“I expect our reporting season will be fairly solid though people won’t be expecting fireworks."

On Wall Street, the Dow Jones Industrial Average rose for the eighth straight day – the longest streak since September 2019. It also went through the 35,000 points mark for the first time since early February last year, and the technology-driven Nasdaq Composite is now up 37.18% so far this year.

The Dow Jones gained 0.31% to 35,061.21 points; S&P 500 increased 0.24 to 4565.72; and Nasdaq was up 0.03% to 14,358.02.

The buoyant mood on Wall Street has been driven by a strong start to their latest earnings season and less concern about aggressive interest rate moves from the Federal Reserve as inflation continues to fall.

At home, Fisher and Paykel Healthcare was down 25c to $24.50; Mainfreight shed $1.35 or 1.86% to $71.05; Auckland International Airport gave up 8c to $8.15; Ryman Healthcare declined 12c to $6.87; and Vulcan Steel decreased 26c or 3.17% to $7.95, falling from $9.29 in a week.

Chorus was down 8c to $8.22; PGG Wrightson declined 11c or 2.63% to $4.08; Blackpearl Group was down 2c or 3.51% to 55c; and Pacific Edge decreased 0.009c or 4.39% to 19.6c.

Napier Port increased 9c or 3.81per cent to $2.45 after reinstating earnings guidance of $34.5m-$36.5m for the year ending September. The port expects nine months of underlying earnings from operations of $29.1m, down from $29.8m in the previous year.

Michael Hill International, unchanged at 99c, reported a 6% increase in group sales to more than $620m for the 53 weeks ending July 2. However, second-half sales were down 0.8%, less than expected, because of the challenging conditions.

Michael Hill Australia's revenue increased 9.1% to $331m, NZ 5.8% to $132.4m and Canada 0.4% to $158.1m. The jewellery retailer expects full-year operating earnings (Ebit) of $56m-$59m compared with $62.9m in the 2022 financial year, with margins slightly down.

Fellow retailers Hallenstein Glasson increased 21c or 3.33% to $6.51; Briscoe Group was up 6c to $4.24; and The Warehouse was down 8c or 4.26% to $1.80.

Generators stocks rise

Mercury Energy, gaining 7.5c to $6.475, reported that fourth-quarter generation increased 36% to 1254GWh compared with the previous corresponding period and 42% to 5209GWH for the year – the highest annual Waikato generation since 1966.

Total connections reached 860,000, 61,000 more than a year ago, and mass market yield for the financial year was $154 per MWh, $7/MWh higher than the previous period, mainly because of the change in customer mix following the Trustpower retail purchase.

Genesis, up 1.5c to $2.67, told the market that continued strong hydro conditions in the fourth quarter drove lower carbon emissions and reduced portfolio generation costs. Total customers are now 483,721, with a gain of 3,779 in the fourth quarter.

In other energy stocks, Meridian gained 9c to $5.47, and Vector was down 4c to $4.

Livestock Improvement Corporation was up 2c or 1.77% to $1.15 after reporting a 5.1% increase in revenue to $276.5m and a 2.4% gain in net profit to $27.35m for the year ending May. The LIC co-operative is paying a final dividend of 16.38c a share on Aug 18.

Property stocks Stride increased 4c or 2.82% to $1.46, and Argosy was up 2c to $1.18.

Tower rebounded 2.5c or 4.2% to 62c; Arvida Group was up 2c to $1.27; Sanford increased 8c or 1.98% to $4.13; and Gentrack gained 6c to $4.26.

Other gainers were 2 Cheap Cars, up 2c or 3.08% to 67c; Accordant Group increasing 5c or 3.76% to $1.38; Carbon Fund adding 3c or 1.81% to $1.69; Geneva Finance improving 2c or 6.06% to 35c; and T&G Global collecting 4c or 2.01% to $2.03.

Tags: Market Close