NZ sharemarket continues to rise

The New Zealand sharemarket traded steadily with a rise of more than 0.5% on the back of a rebound in the United States technology sector as investors there get ready for interest rate cuts.

Thursday, August 1st 2024, 6:47PM

by BusinessDesk

The S&P/NZX 50 Index closed at 12,487.94, up 82.67 points or 0.67% after reaching an intraday high of 12,514.06. The index continued a strong recovery after rising 5.8% in July.

There were 97 gainers and 35 decliners over the whole market on volumes of 27.75 million share transactions worth $95.6m.

Jeremy Sullivan, investment adviser with Hamilton Hindin Greene, said the key driver was the hint from the Federal Reserve’s open market committee that a rate cut would occur next month.

“It’s not a foregone conclusion but the Fed noted there was moderating inflation globally, as well as in the United States,” Sullivan said.

On Wall Street, the Nasdaq Composite led by Nvidia and Meta (Facebook) surged 2.64% to 17,599.4 points – its best one-day since February last year. The S&P 500 was up 1.58% to 5522.3 points – its best performance session for more than five months.

Chip maker Nvidia rebounded 12.81% to US$117.02 and Meta was up 2.51% to US$474.83. Meta reported a 22% increase in quarterly revenue to US$ 39.1 billion, and net income was up 73% to US$13.5b, both beating analysts’ forecasts.

US Federal Reserve chair Jerome Powell said a reduction in its official rate could be on the table as soon as the next meeting in September. Reducing inflation was not the foremost issue; rather it was the rising unemployment level.

"The second quarter’s inflation readings have added to our confidence, and more good data would further strengthen that confidence,” Powell said.

The Federal Reserve is expected to cut its benchmark interest rate by 25 basis points from its current 23-year high of 5.25 to 5.5%. It held the rate at that level for the eighth successive time following its latest meeting.

On the local market

At home, market leader Fisher and Paykel Healthcare was up 50c to $32.85 – it was last at that level in December 2021.

Mainfreight gained $1.09 to $75.60 Fletcher Building was up 6c or 1.92% to $3.18; Spark added 8.5c or 1.97% to $4.405; Skellerup increased 7c to $4.52; ANZ Group collected 69c or 2.17% to $32.50; and Channel Infrastructure improved 4c or 2.7% to $1.52.

Among port companies, Tauranga increased 10c or 1.81% to $5.62; and Napier gained 7c or 2.89% to $2.49.

Insurer Tower added a further 2c or 1.79% to $1.14 and has now risen 82.4% over the past 12 months.

Fonterra Shareholders’ Fund rose 19c or 4.81% to $4.14 following speculation the dairy co-operative has a bidder for its consumer brands business. Sullivan said if that was the case, the fund’s shareholders would receive quite a large capital return.

Mercury Energy was up 7c to $6.95; Seeka increased 7c or 3.03% to $2.38; Serko gained 10c or 2.78% to $3.70; and Sky TV rose 9c or 3.54% to $2.63.

Other gainers were Comvita increasing 2c or 1.82% to $1.12; Heartland Group also up 2c or 1.87% to $1.09; Santana Minerals adding 5c or 3.55% to $1.46; and Metro Performance Glass improving 0.008c or 9.09% to 9.6c.

Ryman Healthcare was unchanged at $4.53 after telling shareholders at the annual meeting that full-year guidance remained unchanged, with positive cash flow, capital expenditure of $700m-$820m and building 850-950 retirement units and aged care beds.

Ryman said lower interest rates would support an improved housing market and liquidity. The retirement village operator has a gearing ratio of 36.2% and funding headroom of $507.5m.

Briscoe Group, up 2c to $4.42, reported record unaudited sales of $372.1m, up 0.77%, for the six months ending July 28. The homeware division’s sales gained 0.28% and sporting goods 1.58% compared with the same period last year. Online recorded 18.77% of the group sales.

Briscoe said the half-year net profit would not be above last year’s $42.7m but it would be above $40m.

Software firm TradeWindow increased 3c or 15% to 23c after announcing a partnership with Sydney-based International Forwarders and Customs Brokers Association, resulting in 26 new contracted customers and taking the total to 541.

KMD Brands was down 1.5c or 3.37% to 43c; a2 Milk declined 11c to $7.82 on profit-taking; Gentrack decreased 15c to $10.35; Stride Property eased 3c or 2.34% to $1.25; and AFT Pharmaceuticals shed 7c or 2.28% to $3.

Green Cross Health, which has 330 pharmacies and 66 medical centres, was down 1c to 87c after telling shareholders at the annual meeting that activity has slowed in the current trading environment, and with its scale, “we are advocating for funding improvements given the chronic Government underfunding of the primary care sector”.

Tags: Market Close