NZ sharemarket shows positive signs after last week's lows

The New Zealand sharemarket started the week on a positive note, with a2 Milk surging nearly 6% after finding renewed favour from investors.

Monday, January 22nd 2024, 5:45PM

by BusinessDesk

The S&P/NZX 50 Index reached an intraday high of 11,713.34 but slipped slightly to close at 11,684.95, up 18.88 points or 0.16% – following five successive down days last week.

There were 74 gainers and 62 decliners over the whole market on volumes of 17.95 million shares worth $63.29 million.

Jeremy Sullivan, investment advisor with Hamilton Hindin Greene, said the local market made a modest gain following buoyant trading offshore, led by the technology stocks.

At the weekend, the S&P 500 in the United States hit an all-time high after rising 1.23% to 4839.81 points, beating the previous record of 4796.56 set on Jan 3, 2022.

The Dow Jones Industrial Average was up 1.05% to 37,863 points, and the Nasdaq Composite increased 1.7% to 15.310.97.

Across the Tasman, the S&P/ASX 200 index was up 0.66% at 7,470.5 points at 6pm NZ time.

Sullivan said the local market was getting primed for key inflation data this week, “which will be a guide to how the Reserve Bank sets future cash rates”.

The market is expecting the December quarter consumer price index to increase 0.5% – the lowest quarterly rise since 2020 – and annual inflation to fall to 4.7%, below the Reserve Bank’s forecast of 5%. It would be the lowest inflation rate since the second quarter of 2021.

ASB Bank said deceleration is expected for both tradable and non-tradable inflation, albeit by differing degrees. Falls for food prices and selected consumer durables should deliver a broadly flat quarter for tradable prices.

The unwinding of the price premium built up over the covid period is expected to be the key catalyst heralding the return to sub-3% inflation by the second half of this year, ASB said.

Global marketer a2 Milk rose 26c or 5.6% to $4.90 after receiving a broker upgrade to a target share price of $5.15.

Sullivan said there has been a slew of positive sentiment towards a2 Milk since the announcement of a better-than-expected birth rate in China.

Ebos Group was up 42c to $35.94; Mercury Energy increased 9c to $6.50; Restaurant Brands gained 15c or 3.9% to $4; Scott Technology added 9c or 2.85% to $3.25; and Seeka rose 17c or 6.85% to $2.65.

Genesis Energy, up 2c to $2.52, reported a strong second quarter. Retail sales increased to 1405GWh or $339.9m compared with 1343GWh or $300.7m for the previous corresponding period and customers grew 4560 to 493,215, up 2.5%.

Retail sales to date were 3048GWh or $760.2m compared with the previous 2925GWh or $676.9m. The Kupe KS-9 drilling has finished, and the first gas is expected to be produced in the third quarter.

Ventia Services reached a new high after gaining 6c or 1.76% to $3.46; CDL Investments increased 2.5c or 3.07% to 84c; ikeGPS improved 2c or 3.77% to 55c; and Chatham Rock Phosphate rose 1.5c or 12.5% to 13.5c.

Fisher and Paykel Healthcare was down 19c to $23.18; Mainfreight declined 45c to $70.90; Freightways shed 15c or 1.79% to $8.25; Fletcher Building decreased 12c or 2.53% to $4.63; Comvita fell 13c or 5.33% to $2.20; and Port of Tauranga was down 14c or 2.59 to $5.26.

Winton Land tumbled 11c or 3.94% to $2.68; Move Logistics was down 2.5c or 4.81% to 49.4c; T&G Global declined 6c or 3.03% to $1.92; Michael Hill decreased 3c or 3.16% to 92c; and Vista Group shed 6c or 3.9% to $1.48.

Property companies Investore was down 4c or 3.33% to $1.16, and Stride declined 3c or 2.16% to $1.36.

Cancer diagnostics company Pacific Edge, down 0.003c or 2.91% to 10c, told the market that the number of tests for the three months ending December declined 15.9% to 7172 compared with the previous quarter, mainly reflecting the reduction in sales team from 34 to 17.

Software firm Blackpearl Group increased 2.5c or 5.26% to 50c after reporting that subscription revenue reached $1.2m at the end of December, up 29% from the previous quarter. Annual recurring revenue totalled $5.5m, up 20%.

Tags: Market Close