NZ shares rise on further hopes inflation tamed

The New Zealand sharemarket surged more than one and a half percent following a strong day on Wall St, where there is a renewed belief that inflation is being beaten down.

Wednesday, November 15th 2023, 6:24PM

by BusinessDesk

The S&P/NZX 50 Index powered up from the opening and closed at 11,352.84, rising 179.56 points or 1.61% on broad-based buying.

There were 101 gainers and 40 decliners over the whole market on increased volumes of 34.75 million share transactions worth $125.62m.

Greg Smith, head of retail with Devon Funds Management, said the catalyst was the soft United States consumer price index (CPI).

“Bond yields have also eased, and there is a view that central banks, including the US Federal Reserve, are done and dusted with interest rate hikes, and there will be a softer economic landing,” he said.

The October CPI was flat, and inflation is running at 3.2% compared with 3.7% for the year ending September. It was the first decline in four months.

The US 10 Year Treasury Note yield fell to a three-month low of 4.43% after shocking shares investors when it went over 5% in October. The NZ 10 Year Government Bond yield was down 16.2 basis points to 4.99%.

The US dollar weakened, and the kiwi cross-rate climbed to US60.19c – its highest level in three months apart from a short blip on Oct 11/12.

Against the backdrop of falling inflation – NZ’s latest CPI is expected to be lower with food prices declining – stock prices rebounded sharply.

The Dow Jones Industrial Average was up 1.43% to 34,827.7 points; the S&P 500 increased 1.91% to 4495.7, and the Nasdaq Composite rose 2.37% to 14,094.38, up 9.6% in November and on pace for its biggest one-month gain since January.

Across the Tasman, the S&P/ASX 200 Index had risen 1.39% to 7104.3 points at 6pm NZ time.

The economically sensitive freighting and interest rate-sensitive property stocks were in demand.

Back in NZ

Mainfreight continued its rise, gaining $3.89 or 6.17% to $66.90 and has increased more than $10 over the past fortnight.

Freightways was up 25c or 3.22% to $8.02; Port of Tauranga rose 32c or 6.2% to $5.48; Marsden Maritime Holdings added 15c or 3.33% to $4.65; and Move Logistics collected 3c or 5.36% to 59c.

All the property stocks made gains. Amongst them, Stride was up 3c or 2.27% to $1.35; Property for Industry increased 5.5c or 2.52% to $2.24; Precinct added 3.5c or 3.04% to $1.185; Goodman Trust collected 6c or 2.86% to $2.155; and Argosy was up 2c or 1.8% to $1.13.

Contact increased 28c or 3.67% to $7.90 after telling shareholders at the annual meeting that the Rio Tinto-owned NZ Aluminium Smelter continued to indicate a desire to maintain operations at Tiwai Point beyond 2024.

Other leading stocks Ebos gained 95c or 2.52% to $38.60; Infratil was up 29.5c or 2.86% to $10.60, and Spark picked up 7c to $5.14.

Publisher and broadcaster NZME increased 7c or 8.43% to 90c after detailing digital growth in its investor presentation. Digital revenue is expected to be 29% of total income this financial year – double the percentage since 2019.

Serko gained 1c to $4.55 on a solid half-year result after capitalising on the recovery in travel and its partnership with Booking.com. Serko’s revenue rose 87% to $36.34m, and its bottom-line loss settled at $7.16m, an improvement of 64%.

Used car dealer 2 Cheap Cars rose 15c or 21.13% to 86c after reporting that half-year revenue was up 4% to $41.9m on higher prices, even though vehicle sales were down 12% to 3776. Net profit increased $2.6m to $3.2m.

Pacific Edge was up 1c or 10% to 11c after telling the market it has integrated Cxbladder tests within the electronic medical records of Kaiser Permanente, which has 12.6m members in the United States. The tests have gone live within 15 urology centres in Southern California.

Tags: Market Close