Sharemarket climbs to highest level in eight weeks

The New Zealand sharemarket climbed to its highest level in eight weeks after delivering its third successive day of gains, with property stocks rebounding.

Wednesday, June 5th 2024, 6:24PM

by BusinessDesk

The S&P/NZX 50 Index finished the session strongly from mid-afternoon and closed at 11,996.71, rising 116.17 points or 0.98% after reaching an intraday low of 11,846.33.

The index has risen 3.77% over the past three trading days and is now up nearly 2% for the year.

There were 68 gainers and 65 decliners over the whole market, with 38.43 million shares worth $149.77m changing hands.

Matt Goodson, managing director of Salt Funds Management, said the local market was relatively buoyant across most of the large cap stocks as money gets put to work.

“Bond yields declined on weak jobs data in the United States and this filtered through to Australia and New Zealand, with property stocks bouncing after having a torrid May,” he said.

US job vacancies fell to 8.06 million in April, down 296,000 on the previous month and the lowest since February 2021. It was below the estimate of 8.4 million vacancies and showed the economy is starting to weaken. The market is now pricing in a 60% likelihood of two interest rate cuts this year.

Australia’s economy posted a modest 0.1% of growth over the first three months of the calendar year, coming in a little weaker than the 0.2% expected lift.

On an annual basis, gross domestic product increased 1.1%, the lowest since the 12 months ending December 2020.

The European Central Bank is expected to be the first to cut rates, 24 basis points to 3.67%, with an announcement on Friday morning (NZ time).

On Wall Street, AI darling Nvidia and the world’s biggest retailer Walmart hit new highs after rising 1.25% to US$1164.37 and 1.19% to US$66.60 respectively.

There was good news on the home front with the Global Dairy Trade index rising 1.7% at the latest auction, with prices for skim milk powder increasing 3% and whole milk 1.7%.

Property stocks rise

On the NZX index, the property sector was up 1.5%. Argosy increased 3c or 2.86% to $1.08; Property for Industry rose 5c or 2.38% to $2.15; Vital Healthcare Trust was up 4.4c or 2.41% to $1.898; and Goodman Trust added 4c or 1.86% to $2.19.

Precinct Properties gained 0.005c to $1.17 after announcing two new Auckland building projects at its Investor Day. Precinct has bought 265 Queen St for $9m and will build up to 500 studio units, starting during the second quarter of next year, in a purpose-built student accommodation development.

It has a conditional agreement to buy a 5250 square metre site linking Dominion Rd and Valley Rd in Mt Eden for $13.25m and develop high-density apartments in conjunction with Eke Panuku Development, starting in the middle of next year.

Fletcher Building was down 11c or 3.49% to a 21-year low of $3.04 after having its credit rating of Baa2 reduced to Baa3 on a negative outlook by Moody’s Ratings. Fletcher said the amended rating does not have a material impact on the company’s cost of funding in the near term.

Fisher and Paykel Healthcare gained $1.15 or 3.82% to a new two-year high of $31.25; Auckland International Airport increased 29c or 3.83% to $7.87; Spark recovered 5c to $4.10; Skellerup was up 9c or 2.43% to $3.79; and Infratil added 23c or 2.12% to $11.07 after going ex-dividend.

In the energy sector, Mercury increased 17c or 2.57% to $6.78; Contact was up 10c to $9.18; Manawa gained 8c or 1.87% to $4.35; Vector added 6c to $3.79; and Meridian was down 7c to $6.48.

Ebos Group declined 29c to $33.71; Mainfreight shed $1.47 or 2.1% to $68.37; Summerset Group fell a further 30c or 3.05% to $9.55; Oceania Healthcare was down 2c or 3.64% to 53c; and Seeka decreased 11c or 4.17% to $2.53.

SkyCity was down 4c or 2.26% to $1.73; Tourism Holdings eased 4c or 2.09% to $1.87; T&G Global declined 5c or 2.86% to $1.70; Foley Wines decreased 2c or 2.22% to 88c; and Millennium & Copthorne Hotels NZ fell 10c or 5.18% to $1.83.

Burger Fuel, up 0.01c to 35c, has returned $4.077m capital to shareholders, and 30% of the shares held by each shareholder have been cancelled.

Tags: Market Close