NZ sharemarket joins in on US-led rally

New Zealand’s sharemarket snapped a five-day losing streak as it joined a global rally on optimism that slower-than-expected US inflation might lead to earlier interest rate cuts.

Thursday, June 13th 2024, 6:15PM

by BusinessDesk

The S&P/NZX 50 index rose 130.76 points, or 1.1%, to 11,872.64. Across the main board, 101 stocks gained, 38 fell, and 43 were unchanged.

Turnover was $126.6 million, with 10 companies trading on volumes of more than a million shares. The local market followed the lead from the US, where the S&P 500 index hit a new record led by strong gains among tech companies. Traders were buoyed by slower-than-expected inflation and shook off the Federal Reserve’s signal of a single rate cut this year when the central bank left its key rate unchanged at its latest meeting.

“Our share market is having a nice day on the back of a strong rally in the US overnight, even though the Fed signalled one rate cut, the May inflation data pointed to an easing in pricing,” said Peter McIntyre, an investment adviser at Craigs Investment Partners. “Volumes are still very low. We’re not flowing through in the afternoon.”

Tourism Holdings led the benchmark index higher, rising 4.4% to $1.92 and extending its gain this week to 6.1%. The rental campervan operator was savaged after downgrading its earnings guidance in May and data yesterday indicated the tourism sector will continue its slow recovery from the pandemic.

Among other companies exposed to tourism, Auckland International Airport rose 0.3% to $7.60, and Air New Zealand increased 0.9% to 54.5 cents. The national airline today said chief corporate officer Mat Bolland will leave at the end of July as part of the company’s efforts to cut costs.

A2 Milk was among the major gainers, rising 3.7% to $7.60. The milk marketing firm has gained 65% this year, bouncing back from fears over the prospects in its biggest market of China, and McIntyre said the company was expected to report a good second-half later this year.

Its processing partner, Synlait Milk, was unchanged at 33.5c having shed about 65% this year as the company contends with a tough recapitalisation. Meanwhile, Fonterra Shareholders’ Fund units rose 1.7% to $4.15.

Retailers were mixed after government data showed softer consumer spending on credit and debit cards in May. Michael Hill International jumped 5.6% to 47c, KMD Holdings, which runs the Kathmandu and Rip Curl brands, rose 3.6% to 43c, Warehouse Group climbed 2.7% to $1.13, and Hallenstein Glasson advanced 1.9% to $5.41. Meanwhile, Briscoe Group fell 0.2% to $4.19, restaurant operator Savor dropped 4.6% to 21c, and fast-food chain Restaurant Brands NZ declined 1.6% to $3.05.

Tech companies led the gains in the US and Australia, and NZ’s small number of firms followed suit, with Being AI up 7.9%, or 0.6 of a cent, to 8.2c, Vista Group International advancing 2.6% to $2.33, Gentrack rising 2.5% to $9.99 and Serko climbing 2% to $3.06.

Comvita was among the biggest decliners today, falling 4.9% to $1.17. The honey products company has declined 15% since a potential suitor decided not to proceed with a takeover bid.

SkyCity Entertainment extended its decline, falling 2.6% to $1.50, with 1.7m shares traded. The casino operator this week said the state regulator had resumed a review into its Adelaide operation.

Spark New Zealand was the most heavily traded company, with 2.3m shares changing hands as the broadband and mobile retailer rose 1.1% to $4.07. Arvida Group was unchanged at 91c with 1.9m shares traded, and Precinct Properties NZ gained 1.7% to $1.18 on a volume of 1.6m.

Ryman Healthcare increased 0.8% to $3.74 on a volume of 1.4m shares. The newly formed FirstCape fund manager emerged as a substantial shareholder of the company today with a 5% stake.

Napier Port shed rights to its 3c dividend today. The shares rose 0.4% to $2.48.

NZME, the publisher of the NZ Herald and BusinessDesk, rose 2.3% to 90c. Rival news organisation Newshub told staff the website will be closed down in the coming months as it migrates its content to Stuff, which will start producing a 6pm TV news bulletin next month.

Tags: Market Close