NZ sharemarket gains over 0.5% as inflation falls

The New Zealand sharemarket staged a strong turnaround, gaining more than 0.5%, as inflation continues to fall – though in some areas, it remains sticky.

Wednesday, April 17th 2024, 6:34PM

by BusinessDesk

The S&P/NZX 50 Index powered ahead in the afternoon and closed at 11,875.35, up 70.51 points or 0.6% after reaching an intraday low of 11,762.28. The index fell nearly 1% the day before.

There were 55 gainers and 87 decliners over the whole market on volumes of 22.72 million share transactions worth $102.24m.

The March quarter consumers price index increased by 0.6%, and annual inflation hit 4%, down from 4.7% at the end of last year.

Tradables (imported) inflation was 1.6%, down from 3%, and non-tradables (domestic) inflation was 5.8%, down from 5.9%, and driven by rents (at their highest level in 25 years), construction of new houses, and cigarettes and tobacco.

Stats NZ’s consumer prices senior manager Nicola Growden said price increases in the March quarter were the smallest since June 2021. However, they remained above the Reserve Bank’s target range of 1-3%.

ANZ Research said domestic inflation pressures remained acute, particularly concentrated in services sectors.

“These are the sticky components which are likely to show persistence moving forward and continue to imply a more gradual easing of inflation than the Reserve Bank has anticipated.”

Greg Smith, head of retail with Devon Funds Management, said the lower inflation provided some relief for investors and “our defensive market is a buttress to the volatility of late”.

He said the US Federal Reserve chair Jerome Powell was looking for more progress on inflation “amid sticky prices” before cutting interest rates, and the same may be true for the Reserve Bank.

“One of the question marks is the recent rise in the oil price and shipping costs and this could be problematic for inflation in the second quarter. We won’t know this until July,” Smith said.

Local market

Fisher and Paykel Healthcare was up 38c to $26.78; Mainfreight rose $1.50 or 2.21% to $69.50; Contact Energy increased 17c or 2.02% to $8.59; Chorus rebounded 20c or 2.74% to $7.505; and Freightways collected 22c or 2.57% to $8.78.

Skellerup added 6c to $4.26; a2 Milk increased 17c or 2.8% to $6.24.Scales Corp gained 6c or 1.91% to $3.20; Hallenstein Glasson was up 9c to $5.70; and Chatham Rock Phosphate was up 0.008c or 4.94% to 17c.

Infratil increased 18c to a new high of $10.99, and its market capitalisation of $9.15 billion makes it the third largest weighting stock on the NZX 50 index behind Fisher and Paykel and Auckland International Airport.

Insurer Tower rose 6c or 7.79% to 83c after upgrading its full-year net profit guidance to greater than $35m from the previous $22m-$27m. The stock has risen more than 16% during the past week.

SkyCity Entertainment, down 1c to $1.87, has appointed Jason Walbridge as the new chief executive. A strategic advisor to global gaming and technology company Aristocrat Leisure in Las Vegas, Walbridge starts his new job in early July.

Ebos Group decreased 38c to $34.63; Meridian Energy eased 7c to $5.76; Restaurant Brands fell 13c or 3.82% to $3.27; The Warehouse was down 4c or 2.72% to $1.43; NZME declined 5c or 5.56% to 85c; and Arvida Group shed 2c or 1.83% to $1.07.

Move Logistics fell 4c or 8% to 46c; Turners Automotive was down 9c or 1.97% to $4.49; Investore declined 2c or 1.79% to $1.10; and Just Life fell 2.5c or 10.2% to 22c.

TradeWindow, up 0.002c to 18.9c, told the market its $2.2m capital raise has gone unconditional after receiving commitments worth more than $1m, including $300,000 to $500,000 from founder and chief executive AJ Smith.

TradeWindow said Smith’s contribution would be as much as 22.7% of the capital sought, above his pro-rata allocation at 17.5c a share, and shareholder approval would be needed.

NZ Windfarms, up 0.002c to 14.1c, told the market that David Prentice, previously with Manawa and Trustpower, has started as its new chief executive.

Blis Technologies, down 0.002c or 10.53% to 1.7c, earlier upgraded its full-year revenue guidance to $11.5m and operating earnings (Ebitda) to $800,000 compared with the previous $11m and $300,000.

Tags: Market Close