Reserve Bank of NZ's rate cut lifts sharemarket as high‑yield stocks climb
The New Zealand sharemarket rose on Wednesday, driven by high-yielding companies after the Reserve Bank of NZ’s 50 basis point cut to the official cash rate.
Wednesday, October 8th 2025, 6:42PM
by BusinessDesk
The S&P/NZX 50 Index closed up 0.27% or 37.19 points, rising to 13,568.48 after 66.1 million shares worth $180.4m were traded.
The S&P/NZX 20 index closed at 7769.11 points, up 0.17%, while the S&P/NZX 10 index ended the day at 12,888.45, falling 0.01%.
There were 99 gainers on the main board and 41 decliners.
'Tipping point'
Generate investment specialist Greg Smith said the market had already locked in a 25bps cut to the official cash rate (OCR).
“I suppose it was a little bit split between would they go for the 50 or would they leave it till November. It’s a bird in the hand approach given what the economy sorely needs,” Smith said.
“I think the tipping point might have been the Quarterly Survey of Business Opinion (QSBO) from yesterday [Tuesday]. If they weren’t there already, that probably tipped things over the edge in favour of a 50 basis point cut.”
Just before the release, in the interest rate markets, two-year swap rates fell to 2.56% from 2.63%.
Smith said the cut would be suitable for exporters and companies sensitive to interest rates or the economy.
He also agreed that the late rise was driven higher by yielding stocks on the property index and the consumer discretionary index, which benefit the most from OCR cuts.
Local stocks
Summerset Group saw its share price rise 51c, or 4.54%, to $11.75 after 492,942 shares traded on a turnover worth $5.76m.
Property for Industry also rose, up 3.15% or 8c to $2.62 on turnover worth $2.68m.
Ryman Healthcare fell, however, down 2.43% to $2.81. Smith said the drop could be related to Ryman’s current suspension of dividend payments.
Meanwhile, gentailers Mercury Energy, Genesis Energy and Meridian Energy saw their share prices lift.
Mercury rose 10c to $6.78, Genesis was up 4c to $2.47, and Meridian lifted 16c to $5.96.
The market’s largest inhabitant, Fisher & Paykel Healthcare, did halt the positive momentum, falling 63c or 1.65% to $37.55 on turnover worth $22.67m. Smith said this was likely because of a rating downgrade from Craigs Investment Partners.
Abroad
Wall Street stocks turned lower on Tuesday (US time) and gold closed in on US$4,000 (NZ$6,963) per ounce as investors weighed the US government shutdown and political turmoil in France.
Wall Street equities opened higher, but stumbled into negative territory soon thereafter, with some seeing signs of a fatigued market after a heady run.
“The momentum is beginning to dry up,” FHN Financial’s Chris Low said. “It just feels to me like this is primarily profit-taking; we need another catalyst.”
All three major indices finished the day lower, with the S&P 500 down 0.4%.
In Europe, the Paris stock market edged back up after a sell-off, even as French President Emmanuel Macron faced a call from his former prime minister, Édouard Philippe, to resign over a deepening political and budget crisis.
London and Frankfurt also ended on a broadly stable note, but the euro fell further against the dollar.
– Additional reporting AFP
| « NZ sharemarket up 0.3% despite business confidence drop | Ryman lifts as NZ sharemarket ends flat after rate‑cut rally fades » |
Special Offers
Comments from our readers
No comments yet
Sign In to add your comment
|
|
Printable version |
|
Email to a friend |
