NZ sharemarket lifts into positive territory for the year

The New Zealand sharemarket burst into positive territory for the year with a late rise, while the country’s biggest company, Fonterra, provided an encouraging trading update.

Thursday, December 7th 2023, 6:26PM

by BusinessDesk

The S&P/NZX 50 Index lacked commitment for most of the day, bouncing up and down. But in the last 45 minutes of trading, the index staged a half percent turnaround and closed at 11,496.61, up 33.12 points or 0.29%.

It meant the index had made a small 0.2% gain for the year to date after starting the week 0.9% behind.

The day before, the NZ market followed Australia and rose 0.94%. There were 78 gainers and 55 decliners on the main board, with 33.66 million shares worth $110.68m changing hands.

Matt Goodson, managing director of Salt Funds Management, said the local market gave back some of the euphoria of the day before. But there’s been a strong bounce since the end of October driven by the sharp fall in US bond yields, which are built into the NZ market.

“The next key step is the February corporate results and the market feeling out the state of the economy.

“The Reserve Bank is continuing its monetary tightening policy, and the market is challenging this. At some point, the market will look forward to the growth prospects beyond,” Goodson said.

In the United States, labour costs fell more than analysts expected, and productivity increased at a higher rate than anticipated. It reinforced the view that the US economy will have a soft landing and the Federal Reserve will cut interest rates next year.

The markets, which fell for the third day in a row (except Nasdaq Composite on one occasion), are now waiting for the latest non-farm payrolls, wages and unemployment numbers, due at the end of the week.

Back In NZ

At home, dairy giant Fonterra lifted its forecast farmgate milk price for the 2023/24 season from 25c to $7.50 per kgMS because of increasing demand for commodity products, including in the Chinese market.

Fonterra’s net profit for the first quarter rose 85% to $392m compared to last year's period, and operating earnings (Ebit) increased 63% to $575m.

Full-year forecast earnings have been upgraded to 50-65c a share, up from 45-60c. Fonterra Shareholders’ Fund was up 7c or 2.34% to $3.06. Global marketer a2 Milk increased 11c or 2.57% to $4.39, and Synlait was down 1c to $1.08.

In the energy sector, Contact was up 5c to $7.88; Vector increased 7c or 1.9% to $3.75; Genesis gained 4c to $2.47; Meridian was down 10c or 1.89% to $5.20; and Manawa declined 5c to $4.36.

In the property sector, Vital Healthcare Trust increased 6.5c or 3.15% to $2.13; Argosy was up 3c or 2.8% to $1.10; and Stride added 3c or 2.26% to $1.36.

Fisher and Paykel Healthcare was up 28c to $23.85; Port of Tauranga collected 11c to $5.47; Vulcan Steel added 24c or 3.09% to $8; NZME gained 3c or 3.45% to 90c; Winton Land increased 5c or 2.08% to $2.45; and Rakon rebounded 4c or 6.56% to 65c.

Eroad gained 3c or 3.41% to 91c; 2 Cheap Cars rose 5c or 6.1% to 87c; Bremworth was up 3c or 5.26% to 60c; and ArborGen increased 0.009c or 5.42% to 17.5c.

Ebos Group decreased 50c to $36.90; Mainfreight was down $1.04 to $68.11; Chorus shed 10c to $7.665; Napier Port declined 13c or 5.33% to $2.31; Just Life Group fell 2.5c or 7.37% to 31.5; and Restaurant Brands was down 17c or 4.38% to $3.71.

In the retirement village sector, Oceania Healthcare increased 3c or 4.41% to 71c, but Summerset Group was down 14c to $9.26; Ryman Healthcare declined 6c to $5.35; and Arvida Group shed 2c or 2.11% to 93c.

Tags: Market Close