NZ sharemarket up 0.4% for second day on interest rate cut hopes

A more confident New Zealand sharemarket reached its highest level in a month, posting its second successive gain of around 0.5%, on widely-held hopes of another big interest rate cut next week.

Tuesday, November 19th 2024, 6:24PM

by BusinessDesk

The S&P/NZX 50 Index traded steadily and closed at 12,816.32, up 51.67 points or 0.4%. The index crept closer to the year’s high of 12,923.22 points set on Oct 21.

Volumes were again strong with 36.11 million share transactions worth $176.43m, led by Infratil and Spark, which move in and out of the MSCI Global Index, respectively, this month.

OCR cut

David McConnochie, an investment adviser with Forsyth Barr, said the market had a strong day, influenced by Australia, which was up more than 1% as healthcare and gold stocks rebounded.

Across the Tasman, the S&P/ASX 200 Index had climbed 1.26% to a new all-time high of 8,404.8 points at 6pm NZ time.

The previous best was 8,384.5 points.

In the latest economic data, NZ producer price inflation increased 4.2% annually after the third quarter, the fastest pace since March last year. Electricity, insurance and transport costs were up, but farm expenses fell 0.2%.

ANZ Research expects a 50 basis point cut in the official cash rate (OCR) to 4.25% next Wednesday, following a similar reduction early last month.

ANZ said data has been mixed since the Reserve Bank of NZ’s (RBNZ) October monetary policy review, but none of it looks likely to upset the apple cart.

After that, ANZ predicted the bank would reduce the pace of easing to standard 25 basis point cuts to reach a trough of 3.5% in May next year.

Local stocks

At home, Fisher and Paykel Healthcare was up 49c to $38.07; Auckland International Airport gained 13c or 1.76% to $7.53; Mercury Energy increased 12c or 1.77% to $6.90; Contact added 13c to $8.62; and Ryman Healthcare collected 13c or 2.73% to $4.90.

Meridian was up 11.5c or 1.96% to $5.99 after releasing its October operating report. National hydro storage increased from 115% to 139% of the historical average, and retail sales volume decreased by 0.6% compared with the same period last year. Large business sales rose 20.5%.

Dual-listed banking stocks ANZ was up 57c to $36.10, and Westpac gained 51c to $37.06 on the back of the strong trading day in Australia.

Napier Port rose 11c or 4.91% to $2.35 after reporting a 15.9% increase in revenue to $141.35m and a 49.7% rise in net profit to $24.83m for the 12 months ending September. It is paying a final dividend of 6c a share on Dec 18.

The company said it is well positioned for further growth post-Cyclone Gabrielle. Container volumes increased 3.4% to 230,000 TEUs (20-foot equivalent units), and bulk cargo was up 9% to 3.47m tonnes.

There was 13.5% growth in log volumes to 2.87m tonnes.

Cruise vessel visits to Napier Port increased from 64 to 89, contributing $9.1m in revenue.

Vulcan Steel increased 21c or 2.53% to $8.51; Investore was up 2c or 1.82% to $1.12; Hallenstein Glasson gained 19c or 2.5% to $7.79; Scales Corp improved 12c or 2.98% to $4.15; Green Cross Health added 2c or 2.63% to 78c; and PGG Wrightson was up 4c or 2.41% to $1.70.

Other gainers were 2 Cheap Cars up 3c or 3.8% to 82c; Radius Residential Care rising 1.8c or 9.38% to 21c; Burger Fuel collecting 1.5c or 5.17% to 30.5c; Carbon Fund increasing 6c or 3.55% to $1.75; and ikeGPS improving 2c or 3.57% to 58c.

It was a volatile day for Infratil, down 16.5c to $12.185, as passive investment funds that track the MSCI Global Index chased shares – trading reached 4.36m shares worth more than $53.5m. The stock price ranged from a high of $12.52 to a low of $12.135.

Spark, down 6c or 1.91% to $3.0985, was also hit by heavy trading – 4.8m shares worth $14.97m - as the passive funds offloaded their holdings.

KMD Brands was down 1c or 2.33% to 42c after reporting a 5.8% decline in group sales for the first quarter ending Oct 24. Rip Curl sales were down 6.7%, Oboz shoes fell 8.6%, and Kathmandu decreased 2.7%, though gross profit dollars were ahead of the same period last year.

Gentrack decreased 37c or 3.51% to $10.17; Mainfreight was down 50c to $73.20; Freightways shed 10c to $10.54; Ventia Services fell 19c or 3.59% to $5.10; Third Age Health declined 9c or $3.83 to $2.26; Synlait Milk eased 1.5c or 3.8% to 38c; and Marsden Maritime Holdings was down 8c or 2.27% to $3.45.

Rakon, unchanged at 68c, told the market its master reference oscillator subsystem had been selected by the German Aerospace Centre for an in-orbit mission on board the International Space Station.

Tags: Market Close