NZ sharemarket close to wiping out its deficit for the year

The New Zealand sharemarket is close to wiping out its deficit for the year after rising nearly 1%, while Synlait Milk hit an all-time low.

Wednesday, December 6th 2023, 6:24PM

by BusinessDesk

After a strong opening in Australia, the S&P/NZX 50 Index kicked into gear at lunchtime and closed at 11,463.49, up 106.5 points or 0.94%.

The index began the week 0.9% down for the year and is now just 0.06% from entering positive territory.

The NZX index is having its sixth successive week of gains and has made ground in five of the last six quarters, apart from the three months ending September.

There were 77 gainers and 56 decliners over the whole market on increased volumes of 37.4 million shares worth $112.57m.

Across the Tasman, the S&P/ASX 200 Index had risen 1.77% to 7186.5 points at 6pm NZ time. Apple became a $3 trillion company in the United States after gaining 2.11% to US$193.42 (NZ$315.47). The US major indices were mixed, with the Nasdaq Composite the only one rising, up 0.31% to 14,229.91 points.

Jeremy Sullivan, investment advisor with Hamilton Hindin Greene, said everything is quite rosy.

“The Federal Reserve is expecting a soft economic landing in the US, and the expectation of lower interest rates there next year is buoying our market, bringing positive moves on the NZX.

“Weaker labour data in the US further cemented views of a potential rate cut by the Fed. The crude oil price continues to fall back, the latest global dairy trade auction was up 1.6%, and there’s an increase in house sales in Auckland,” Sullivan said.

In the auction, whole milk powder was up 2.1% to US$3104 a metric tonne, skim milk powder gained 1.2% to US$2671MT, and cheddar cheese rose 9.7% to US$3986MT.

ASB chief economist Nick Tuffley said there are some early positive signs for the economy, which looks like it is past the worst. The housing market and business confidence are on the rise.

Not all rosy

However, growth is being propped up by migration, and the lagged impacts of higher interest rates are still flowing through. Per capita gross domestic product is likely to edge down while unemployment rises.

Tuffley said inflation is gradually falling, but interest rates are likely to remain high throughout next year. It will be late in the year before inflation gets back to the 1-3% target.

He cautioned that the global environment remains soggy, with added risks of widening military and political conflict and China’s under-whelming post-Covid rebound.

Synlait, coming out of the NZX top 50, was down 9c or 7.63% to $1.09 for the first time in its 20 years as a listed company. Its peak was $12.80 on August 1, 2018.

Sullivan said Synlait has some well-known debt repayments due next year. It is carrying a net debt of $413.5m, which increased by 21% in the last financial year. Fisher and Paykel Healthcare was up 37c to $23.57; Mainfreight added 75c to $70; Freightways increased 10c to $8.36; Spark collected 6.5c to $5.17; Fletcher Building gained 5c to $4.69; a2 Milk picked up 6c to $4.48; and Infratil collected 18c or 1.82% to $10.08.

Energy companies Mercury increased 14c or 2.28% to $6.28, Meridian was up 10c or 1.92% to $5.30, and Contact gained 13c to $7.83.

Property companies Stride was up 3c or 2.31% to $1.33; Vital Healthcare Trust was down 4.5c or 2.13% to $2.065; and Argosy Property shed 2c or 1.83% to $1.07.

Transtasman fuel supplier Ampol rose $2.09 or 6.06% to $36.60; Heartland Group was up 3c or 1.88% to $1.63; Eroad increased 3c or 3.53% to 88c; Accordant Group gained 2c or 2.11% to 97c; and Blackpearl Group added 3c or 6.12% to 52c.

Turners Automotive was down 9c or 1.9% to $4.65; Scott Technology declined 6c to $3.37; ikeGPS fell 3c or 5.66% to 50c; and KMD Brands decreased 2c or 2.63% to 74c.

Tags: Market Close