Late rally leaves market on positive note

The New Zealand sharemarket staged an admirable comeback to end the day in positive territory after being down almost 1 per cent at one stage.

Friday, January 5th 2024, 10:18AM

by BusinessDesk

The S&P/NZX 50 recovered from its intraday low of 11,635.75 with a late rally sending the benchmark index up 28.98 points to 11,759.11, for a gain of 0.25 per cent following Wednesday’s 40-point decline.

There were 58 gainers and 71 decliners over the whole market with a light turnover of 13.2 million shares worth $54.83 million changing hands.

“We did see a nice improvement, mostly led by Infratil and the electricity stocks,” said Grant Williamson, a director at Hamilton Hindin Greene.

“It’s a real mixed bag though and to be honest, I believe at this time of the year you can’t read too much into movements on the local market because we’ve just got so many of the large players out of the market.”

Infratil was up another 18c or 1.78 per cent to $10.30 following its earlier announcement of further valuation increases on its investment in CDC Data Centres, which is benefiting from demand for artificial intelligence.

The late comeback on the NZX was all the more impressive given another down day on Wall Street.

The big issue for investors remains the timing of central banks’ expected pivot to interest rate cuts and while the US Federal Reserve offered some fresh insight, the minutes from its December meeting failed to shake off the uncertainty.

Most Fed officials want to keep borrowing costs high “for some time”, adding to doubts that the US central bank is poised to begin cutting interest rates as early as March, the Financial Times reported.

“The Fed minutes hinted that it might be a few months before we start to see any interest rate declines in America,” Williamson said.

“There are such high expectations that rates are going to decline quickly and I think investors sort of took those minutes as an indication that it might just take a wee bit longer before they start falling. There were no reasons for investors to buy on the back of those minutes.”

Energy stocks were higher, however, as investors hunted for yield.

Meridian was up 15c or 2.76 per cent to $5.59, Mercury gained 11c or 1.67 per cent to $6.71, Contact added 1c or 0.13 per cent to $8.01, and Genesis was up 1.5c or 0.61 per cent to $2.48. Manawa slipped 5c or 1.16 per cent to $4.25.

There was action on the retirement village front with Arvida giving up most of Wednesday’s gains, falling 7c or 5.88 per cent to $1.12. Ryman was down 3c or 0.51 per cent at $5.85 and Summerset was unchanged at $10.28.

Vista Group, up 3c or 1.84 per cent to $1.66, Comvita, up 6c or 2.61 per cent to $2.36 and My Food Bag, up half a cent or 3.13 per cent to 16.5c, were other notable gainers.

On the downside, Ebos fell 7c or 0.19 per cent to $36.15, Sky TV dipped 2c or 0.73 per cent to $2.73, Auckland International Airport slid 16c or 1.87 per cent to $8.40 and Freightways was down 7c or 0.83 per cent at $8.40.

Good Spirits Hospitality was unchanged at 2.2c after coming out of a trading halt late in the day. The company gave a further update on its loan with Pacific Dawn, saying it had repaid $15.7m of the $19.25m left owing and was still working toward delisting and paying a $600,000 dividend to shareholders.

Tags: Market Close