‘Impressively resilient’ NZX 50 up 0.3%

New Zealand's headline share index started the week with small gains while US markets signalled a fall tonight after harsher sanctions were imposed on Russia over the weekend.

Monday, February 28th 2022, 6:48PM

by BusinessDesk

The S&P/NZX 50 Index rose 40 points, or 0.3%, to 11963.23. Turnover was higher than usual at $302 million as the MSCI Indices had their quarterly rebalance.

Trading was very light prior to the rebalance as investors were likely waiting to see how US markets opened tonight after European countries agreed to a harsher set of sanctions against Russia over the weekend.

“Over the weekend, sanctions were seriously escalated with Europe fully on board,” said Jeffrey Halley, an analyst at Oanda.

“Notably, the EU, Britain and the US are freezing the Russian central bank's assets, meaning they can’t be deployed to intervene in currency markets.”

Bloomberg reported the Russian currency was down almost 30% against the US dollar in thin Asian trading on Monday – US and Russian markets hadn’t opened at the time of writing.

President Putin put Russian nuclear forces on high alert in an effort to deter NATO supplies from being sent into Ukraine and further sanctions being imposed.

Halley said Asian equity markets were “impressively resilient” in the face of high levels of uncertainty and tumbling US index futures.

Australia’s ASX 200 actually climbed half a percent, with some of its stocks likely to benefit from high commodity prices, while Hong Kong’s Hang Seng fell 1.4%.

Tourism Holdings led the local index higher – climbing 6.1% to $2.62 – after Andy Bowley, Forsyth Barr’s head of research, reiterated his positive view of the stock.

Bowley said the company had already pre-released its headline financial results so there wasn’t much new information in its earnings release last week.

“We anticipate the second half of 2022 will be the last covid-19 related loss-making period before Tourism Holdings benefits from recovery tailwinds over the next few years,” he said.

The NZ government today announced it would ditch the self-isolation requirement for vaccinated travellers either from Australia, or who are NZ citizens, by the end of this week.

Bowley said the opening of Australia's borders will offer “a huge boost” to Tourism Holding’s rental recovery over the next year, and NZ’s eventual reopening will be the same.

Vector was up 3% at $3.80 with Jarden analysts lifting their ‘sell’ recommendation as the utility firm’s shares had fallen more than 8% year-to-date.

“Due to a fall in the share price, Vector is now trading in line with our target price. We, therefore, upgrade our rating to Neutral from Sell,” he said.

Fruit exporter Scales Corporation rose 5% to $5.05 and Ryman Healthcare was up 4.9% at $10.

Shares in media company NZME climbed 7.7% to $1.40, despite its largest shareholder announcing it had dropped its stake from 16% to 15%.

Property for Industry had the day’s biggest decline, falling 2.9% to $2.70, followed by Eroad which was down 2.8% at $3.77.

The NZ dollar was trading at 66.90 US cents at 3pm in Wellington, little changed from 66.94 cents yesterday despite upheaval in the Russian ruble.

Tags: Market Close

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