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Market hits four month high

New Zealand shares rallied to a four-month high as some investors were encouraged by better-than-expected US jobs data and continued central bank support.

Friday, July 3rd 2020, 7:01PM

by BusinessDesk

The S&P/NZX 50 Index rose 56.18 points, or 0.5 percent, to 11,558.70 — the highest close since March 5. Within the index, 23 stocks rose, 22 fell, and five were unchanged. Turnover was $123.8 million.

Share markets across Asia rose to their highest level since the end of February, based on the MSCI Asia Index.

Today’s rally was driven by reports that nonfarm jobs in the United States increased by 4.8 million in June, beating the expectation of economists who predicted a lift of 3 million jobs.

The recuperating job market had been taken by some investors as a signal of wider economic recovery and bolstered market sentiment, ASB economist Mark Smith said.

Michael McCarthy, chief market strategist at CMC Markets, said the market was reacting to the good data and ignoring the bad.

“Released alongside that very strong nonfarm payrolls we saw an increase in unemployment claims and weak durable goods orders,” he said. “But that doesn’t seem to faze the market.”

That indicated markets were being driven by the flood of money central banks were pumping out, with good news just acting as a catalyst to buy. 

“Further evidence for that is the gains we are seeing in bonds and the fact that gold prices remain near seven-year highs,” McCarthy said. 

Trading volumes have been lighter than usual during the past week, which McCarthy said may be a reason to be suspicious of the rally. Anecdotally, retail investors were driving up prices while institutions had already sold down their portfolios, he said.  

“Enthusiastic individual investors are pushing prices, but the pros who are concerned don’t have anything to sell to them.”   

The leaders on the local benchmark today were mostly stocks considered to be defensive in nature.

Internet infrastructure provider Chorus was up 3.8 percent at $7.67 and Contact Energy gained 3.7 percent at $6.70.

Retirement property developer Summerset Group Holdings rose 3 percent to $6.59 and Stride Property advanced 2.7 percent to $1.91. 

Fuel retailer Z Energy rose 2.2 percent to $2.81, while New Zealand Refining Company dropped 3.9 percent to 74 cents.

Fisher & Paykel Healthcare slipped 0.4 percent to $34.50. The stock is up 7.8 percent this week following on from its blockbuster earnings result on Monday.

Among other exporters, Pushpay Holdings dropped 3.6 percent to $9.06, Tourism Holdings fell 1 percent to $1.90 and Skellerup Holdings edged 0.5 percent lower to $2.12.

Kathmandu Holdings posted the day’s biggest decline, dropping 5.5 percent to $1.20. Yesterday, the retailer bounced 11 percent after it said it would be profitable at an operational level for the rest of the year. The stock is still up 4.4 percent this week.

Market operator NZX held at $1.42. Total equity trades in June almost tripled from a year earlier. The total value of trades was almost double those last June at $5.2 billion.

Outside of the benchmark, Pacific Edge shares more than doubled in value on confirmation of acceptance under a key US medical regulation for its Cxbladder cancer test. The shares jumped 103.7 percent to 55 cents from 27 cents yesterday.

Tags: Market Close

« NZ shares rise as vaccine news spurs optimismNZ shares rise as Metlifecare jumps on new takeover bid »

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Lender Flt 1yr 2yr 3yr
AIA 4.55 2.55 2.69 2.79
ANZ 4.44 3.15 3.25 3.39
ANZ Special - 2.55 2.69 2.79
ASB Bank 4.45 2.55 2.69 2.79
Bluestone 3.49 3.49 3.49 3.49
BNZ - Classic - 2.55 2.69 2.79
BNZ - Mortgage One 5.15 - - -
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BNZ - Std, FlyBuys 4.55 3.15 3.29 3.39
BNZ - TotalMoney 4.55 - - -
CFML Loans 4.95 - - -
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China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.45 - - -
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Credit Union South 5.65 3.95 3.85 -
First Credit Union Special 5.85 2.95 3.45 -
Heartland 3.95 2.89 2.97 3.39
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HSBC Premier LVR > 80% - - - -
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HSBC Special - - - -
ICBC 3.69 2.45 2.65 2.79
Kainga Ora 4.43 2.93 3.07 3.24
Kiwibank 3.40 3.30 3.54 3.54
Kiwibank - Offset 3.40 - - -
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Liberty 5.69 - - -
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SBS Bank Special - 2.55 2.49 2.49
The Co-operative Bank - Owner Occ 4.40 2.55 2.69 2.79
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Median 4.55 2.95 2.99 2.80

Last updated: 16 October 2020 9:35am

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