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The Markets

Shares rise, dollar hits 14-month high

The benchmark index halted a two-day decline as upbeat economic data in key markets helped prop up investor sentiment regarding global recovery. The New Zealand dollar climbed to a 14-month high.

Wednesday, September 2nd 2020, 6:26PM

by BusinessDesk

The S&P/NZX 50 Index rose 109.82 points, 0.9 percent, to 11,902.98. Within the index, 35 stocks rose, six fell and nine were unchanged. Turnover was $205 million.

Investors reversed some of the 2.5 percent loss the index incurred over the past two days after improving manufacturing data in China and the US stoked optimism about the local economy.

FX traders were also more positive about the kiwi dollar relative to the fragile USD, which slid further overnight, propelling the NZD/USD to a 14-month high.

The kiwi was trading at 67.80 US cents at 5pm in Wellington, up from 67.57 cents yesterday.

The currency also spiked against the Australian dollar after data was released showing that country’s gross domestic product dropped 7 percent, putting it officially in recession. Economists had been picking a 6 percent decline.

The kiwi traded at 92.16 Australian cents at 5pm from 91.30 cents, the trade-weighted index was at 72.64, up from 72.17 yesterday, 71.89 yen from 71.46 yen, 56.94 euro cents from 56.35 cents, 60.67 British pence from 50.38 pence, and 4.6303 Chinese yuan from 4.6087 yuan.

Shares on the NZX 50 rallied on some economic optimism despite the strong currency providing a headwind for exporters.

“The bulls remain in control with the Nasdaq and S&P 500 hitting new record highs overnight,” said Greg Smith, head of research at Fat Prophets. “The New Zealand market continues to be a standout in the region, despite all the disruption from the (cyber) attacks.”

Vista Group International led the market higher, gaining 3.9 percent to $1.85, likely following a lead from Wall Street tech stocks which saw strong gains overnight. 

Fletcher Building was up 3.8 percent to $3.57 and Restaurant Brands rose 3.4 percent to $12.44, both stocks were likely buoyed by optimism for a stronger domestic economy.

Restaurant Brands settled the acquisition of 58 KFC stores and 11 multibrand KFC and Taco Bell stores in California overnight.

The gains were broad based with only six stocks weaker. Pushpay Holdings posted the biggest decline, falling 4 percent to $8.26. The faith sector donations app operates primarily in the United States and is affected by the weakened currency.

Other stocks sensitive to the exchange rate were mixed. Fisher & Paykel Healthcare rallied 1.8 percent, after two days of declines, A2 Milk held at $18.30 and Synlait Milk fell 1 percent to $6.22.

Outside the top 50 companies, The Warehouse Group announced plans to cut up to 750 jobs as it looks to restructure its operations at more than 60 stores. Its shares fell 1.5 percent to $2.04.

Gentrack Group gained 1.3 percent to $1.58. The company today appointed a new chief executive after a lengthy search. Former Amdocs executive Gary Miles will take the lead from the London office starting in October.

Tags: Market Close

« Strong currency weighs down exportersEntertainment stocks lead market rally »

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Lender Flt 1yr 2yr 3yr
AIA 4.55 2.55 2.69 2.79
ANZ 4.44 3.09 3.25 3.39
ANZ Special - 2.49 2.69 2.79
ASB Bank 4.45 2.49 2.59 2.65
Bluestone 3.49 3.49 3.49 3.49
BNZ - Classic - 2.49 2.69 2.79
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 3.09 3.29 3.39
BNZ - TotalMoney 4.55 - - -
CFML Loans 4.95 - - -
Lender Flt 1yr 2yr 3yr
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.45 - - -
Credit Union Baywide 5.65 3.95 3.85 -
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
Heartland Bank - Online 2.50 1.99 2.35 2.45
Heretaunga Building Society 4.99 3.50 3.40 -
HSBC Premier 4.49 2.25 2.35 2.65
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 3.69 2.45 ▼2.45 ▼2.65
Kainga Ora 4.43 2.93 3.07 3.24
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank 3.40 3.30 3.50 3.50
Kiwibank - Offset 3.40 - - -
Kiwibank Special 3.40 2.55 2.65 2.65
Liberty 5.69 - - -
Nelson Building Society 4.95 3.45 3.49 -
Pepper Essential 4.79 - - -
Resimac 3.39 3.35 2.99 3.35
Lender Flt 1yr 2yr 3yr
SBS Bank 4.54 2.99 ▼3.09 ▼3.15
SBS Bank Special - 2.49 ▼2.59 ▼2.65
The Co-operative Bank - First Home Special - - - -
The Co-operative Bank - Owner Occ 4.40 2.49 2.69 2.79
The Co-operative Bank - Standard 4.40 2.99 3.19 3.29
TSB Bank 5.34 3.29 3.29 3.59
TSB Special 4.54 2.49 2.49 2.79
Wairarapa Building Society 4.99 3.55 3.49 -
Westpac 4.59 3.09 3.29 3.39
Westpac - Offset 4.59 - - -
Westpac Special - 2.49 2.69 2.79
Median 4.55 2.94 3.07 2.80

Last updated: 27 November 2020 3:57pm

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