Dimming faith in interest rate cuts give NZ market the jitters

An uncertain New Zealand sharemarket followed a sharp fall on Wall Street, now losing faith in an early interest rate cut, with a small loss after a late recovery in the day.

Friday, May 24th 2024, 6:18PM

by BusinessDesk

The S&P/NZX 50 Index was steady in the morning, down at lunchtime and up in the afternoon to close at 11,783.39, declining 26.09 points or 0.22%.

The index ended the week ahead 0.7% and is now up 0.1% for the year. There were 98 decliners and 37 gainers on the main board with 33.53 million shares worth $118.53m changing hands.

Paul Robertshawe, chief investment officer with Octagon Asset Management, said there was plenty of caution on the local market, especially concerning domestic cyclical stocks.

“Downgrades are still coming through, though there’s been some good results from companies steadying the ship such as My Food Bag and Eroad. Investors are trying to pick the bottom of the earnings cycle.

“Two big high-quality companies, Fisher and Paykel Healthcare and Mainfreight, are reporting next week and it will be interesting to see their outlooks. People look for growth from these companies,” Robertshawe said.

On Wall Street, the Dow Jones Industrial Average had its worst day this year, falling 605 points or 1.53% to 39,065.26 after the May Purchasing Managers Index reached a 12-month high of 50.9, well above the estimate of 50.

The data dimmed hopes of the Federal Reserve cutting interest rates in September. The S&P 500 declined 0.74% to 5267.84 points, and Nasdaq Composite was down 0.39% to 16,736.03. Across the Tasman, the S&P/ASX 200 Index had fallen 1.01% to 7732.8 points at 5.45pm NZ time.

Chipmaker and artificial intelligence darling Nvidia increased 9.32% to US$1037.99, after announcing stronger-than-expected first-quarter results and a 10-for-one share split.

On the NZ market

At home, Fisher & Paykel Healthcare was down 16c to $28.33; Mainfreight declined 28c to $67.72; Fletcher Building fell 19c or 5.96% to $3; Chorus eased 9.5c to $7.305; and Gentrack decreased 11c to $9.75.

Arvida Group declined 2c or 2% to 98c; Manawa Energy shed 9c or 2.12% to $4.16; Synlait was down 3c or 6.25% to 45c; AFT Pharmaceuticals fell 23c or 7.32% to $2.91; and Tourism Holdings decreased 4c or 1.99% to $1.97.

In the property sector, Kiwi shed 1.5c or 1.8% to 82c; Property for Industry was up 3c or 1.39% to $2.19; Investore gained 3.6c or 3.61% to $1.04; and Precinct added 2.5c or 2.17% to $1.175.

A2 Milk gained a further 11c to $7.76; Enprise Group was up 1.5c or 3.23% to 48c; Foley Wines improved 2c or 2.56% to 80c; and Millennium & Copthorne Hotels NZ added 7c or 3.98% to $1.83.

Oceania Healthcare was up 2c or 3.57% to 58c after reporting a 7% increase in revenue to $265.46m and 104% rise in net profit to $31.47m for the year ending March. Operating earnings (ebitda) were $82.6m, up 3%, and Oceania’s total sales volumes were up 16.7 % compared with the previous year, including a 22.7 % increase in new sales.

Oceania has appointed Suzanne Dvorak as the new chief executive. She has spent the past decade working in the Australian aged care and retirement living sector, including managing director of Bupa Villages.

Used car retailer 2 Cheap Cars increased 8c or 10% to 88c after reporting full-year revenue of $86.78m, up 5%, and net profit of $6.24m, up 38.3%. It is paying a final dividend of 4.16c a share on June 14.

Vehicle sales were down 2% to 8169 and 2 Cheap Cars' market share is 4.5%.

Blis Technologies gained 0.001c or 6.25% to 1.7c on full-year revenue of $11.52m, up 14%, and net profit of $646,000, a turnaround from a $1.35m loss in the previous year.

Fintech PaySauce, down 1c or 3.7 % to 26c, earlier reported a maiden full-year net profit of $1.2m and 33% rise in revenue to $7.7m, helped by a 7% increase in customers to 7368 and 11% gain in average monthly revenue per user to $91.

Tags: Market Close