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Kiwi, stocks bounce back from Fed scare

The New Zealand dollar and local stock market bounced back from last week’s losses as investors’ fears interest rates might be on the rise were soothed by calming words from the Federal Reserve.

Friday, June 25th 2021, 7:00PM

by BusinessDesk

The kiwi rose for a fourth day to trade at 70.71 US cents at 3pm in Wellington from 70.50 cents yesterday and 70.05 cents last week, while the S&P/NZX 50 Index advanced 39.2 points, or 0.3% to 12,626.09, up about 0.6% from last week.

Equity markets and risk-sensitive currencies such as the kiwi were sold off sharply last week when stronger than expected US inflation stoked expectations the Fed will launch into hiking interest rates sooner than expected. Fed chair Jerome Powell played down those inflationary fears, taking some of the steam out of the greenback and breathing life back into equity markets.

“We got a big fright last week which pushed up the US dollar,” said Imre Speizer, head of NZ strategy at Westpac. Things quietened down this week and the kiwi bounced back, he said.

Turnover on the wider market was $161.1 million, with 93 of the 186 securities on the main board gaining.

Peter McIntyre, an investment adviser at Craigs Investment Partners, said trading was muted today with most of the direction coming from overseas. Banking and mining stocks on the ASX had come into favour, which spilled over to the NZ market.

“People are switching from technology stocks into financials and resources,” he said.

Dual-listed financial companies gained, with Westpac up 0.4% at $27.80, ANZ Bank advancing 1.1% to $30.45, and AMP climbing 2.4% to $1.28. NZ Oil & Gas, which has interests in Australian exploration projects, increased 2.3% to 44 cents.

A2 Milk led the NZX50 higher, up 2.9% at $6.75 as it continues to recover from its savage selloff following its profit downgrades. Supplier Synlait Milk increased 1.4% to $3.73.

McIntyre said A2 Milk is still trading below most analysts’ target prices.

Outside the benchmark index, Comvita climbed 4.9% to $3.44 after saying its 618 festival sales in China rose 31%.

Z Energy rose 2.3% to $2.70, with an unusually large volume of 4.5 million shares. The transport fuels company noted substantial shareholder L1 Capital, an Australian fund manager, lifted its stake to 6.7%.

Vista Group International posted the day’s biggest fall, down 3.3% to $2.35 and extending yesterday’s decline.

Tourism Holdings gave up some of yesterday’s gains, falling 1.5% to $2.60. The rental RV operator yesterday said it expects to report a smaller loss than some analysts had feared.

Fisher & Paykel Healthcare, which benefits from a weaker currency, fell 1.6% to $31.35.

The local currency rose against its major trading partners, with the trade-weighted index at 74.33 from 74.21 yesterday, and up from 73.60 last week. The kiwi rose to 50.75 British pence from 50.48 pence, increased to 93.16 Australian cents from 93.06 cents, advanced to 78.42 yen from 78.24 yen, traded at 59.21 euro cents from 59.12 cents, and climbed to 4.5715 Chinese yuan from 4.5660 yuan.

Tags: Market Close

« NZ shares flat but THL bounces on profit upgradeTravel stocks drop as trans-Tasman bubble deflates »

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Lender Flt 1yr 2yr 3yr
AIA 4.55 2.55 2.95 3.29
ANZ 4.44 3.10 3.50 3.84
ANZ Blueprint to Build 1.68 - - -
ANZ Special - 2.50 2.90 3.24
ASB Back My Build 1.79 - - -
ASB Bank 4.45 2.55 2.95 3.29
Basecorp Finance 5.49 - - -
Bluestone 3.49 3.34 2.99 3.34
BNZ - Classic - 2.55 2.95 3.25
BNZ - Mortgage One 5.15 - - -
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BNZ - Std, FlyBuys 4.55 3.15 3.22 3.85
BNZ - TotalMoney 4.55 - - -
CFML Loans 4.95 - - -
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
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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 Bank - Online 1.95 1.85 2.35 2.45
Heretaunga Building Society 4.99 3.80 3.90 -
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HSBC Premier 4.49 2.19 2.45 2.69
HSBC Premier LVR > 80% - - - -
HSBC Special - 2.25 - -
ICBC 3.69 ▲2.29 ▲2.69 ▲2.99
Kainga Ora 4.43 2.67 2.97 3.13
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank 3.75 3.34 3.34 4.14
Kiwibank - Offset 3.75 - - -
Kiwibank Special 3.75 2.49 2.49 3.29
Liberty 5.69 - - -
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The Co-operative Bank - Standard 4.40 2.99 3.39 3.69
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TSB Special 4.54 2.50 2.89 3.24
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Median 4.54 2.68 2.99 3.29

Last updated: 29 July 2021 9:04am

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