Market close: NZ shares chalk up solid gain ahead of Federal Reserve’s rate decision

The New Zealand sharemarket chalked up another solid day’s work with a one per cent rise following strong gains on Wall Street and renewed buying in the local blue chip stocks.

The S&P/NZX 500 Index
climbed steadily all day and closed at 12,090.93, up 123.21 points or 1.03 per cent. The index has now risen more than 5 per cent so far this year.

There were 82 gainers and 41 decliners over the whole market with 38.77 million shares worth $135.81 million changing hands.

Matt Goodson, managing director of Salt Funds Management, said despite the uncertainty over corporate earnings forecasts and the United States Federal Reserve decision on interest rates, people want to own shares rather than bonds.

“That’s been the story since the start of January and it spilled over to New Zealand and Australia. The markets have moved to a goldilocks narrative that sees central banks going on hold or starting to cut rates, and corporate downgrade risks being of no great concern,” he said.

Goodson said the latest labour market figures had to be interpreted with care. The labour market had softened slightly with unemployment increasing to 3.4 per cent, from 3.3 per cent, in the December quarter. But relatively strong wage inflation is coming through but quite as strong as the Reserve Bank expected.

All salary and wage rates (including overtime), measured in the labour cost index, increased 4.1 per cent, compared with 3.7 per cent in the September 2022 quarter – the largest annual rise since the series began in 1992.

Goodson said the Reserve Bank is now expected “to move well and truly away” from the 75 basis points rise in the official cash rate to 50 basis points when it meets later this month.

On Wall Street, the Dow Jones Industrial Average was up 1.09 per cent to 34,086.04 points; S&P 500 increased 1.46 per cent to 4076.6, having its best January since 2001 with a 6.18 per cent rise; and Nasdaq Composite rose 1.67 per cent to 11,584.55, up 10.68 per cent for the month.

Across the Tasman, the S&P/ASX 200 Index had risen 0.29 per cent to 7498.6 points, a new 100-day high, at 6pm NZ time.

At home, market leader Fisher and Paykel Healthcare increased 66c or 2.61 per cent to $25.92; Fletcher Building recovered 18c or 3.55 per cent to $5.25 after being marked down in the matching session the day before; and Mercury Energy rose 23.5c or 3.92 per cent to $6.23.

Auckland International Airport, with buying from overseas pension funds, continued to climb, gaining 12c to a three-year high of $8.62. Its peak was $9.85 achieved on June 1, 2019.

Spark was up 7c to $5.275; Meridian Energy gained 7c to $5.40; Mainfreight collected 85c to $72.30; Chorus rose 16c or 1.91 per cent to $8.52; a2 Milk added 11c to $7.52; Skellerup was up 12c or 2.25 per cent to $5.45; and ANZ increased 60c or 2.2 per cent to $27.90.

The only leading stock pegged back was Ebos Group, down 90c or 2.09 per cent to $42.10.

Stride Property was up 4c or 2.88 per cent to $1.43; Serko rose 21c or 8.27 per cent to $2.75; Napier Port increased 9c or 3.06 per cent to $3.03; Arvida Group gained 2c or 1.72 per cent to $1.18; and Air New Zealand added 1c to 78.5c.

Fonterra Shareholders’ Fund increased 9c or 2.79 per cent to $3.32; Vista Group added 3c or 2.07 per cent to $1.48; Move Logistics was up 3c or 2.8 per cent to $1.10; and Rakon gained 2c or 1.96 per cent to $1.04.

In the energy sector, Contact gained 4c to $7.80; Vector was up 5c to $4.30; and Manawa was down 10c or 1.82 per cent to $5.39.

Briscoe Group gave up 12c or 2.54 per cent to $4.61; Seeka shed 10c or 3.03 per cent to $3.20; Task Group declined 1.5c or 3.85 per cent to 37.5c; Vital Healthcare Property Trust was down 4.5c or 1.88 per cent to $2.35; and Private Land and Property Fund decreased 4c or 3.03 per cent to $1.28.

Cannasouth, up 0.005c or 1.75 per cent to 29c, told the market the sale of manufacturing subsidiary Midwest Pharmaceuticals to Harker Herbal Products has been delayed until the end of this month – with one government agency still having to complete the transfer of consents.

Greenfern Industries co-founder John Hussey is stepping down from day-to-day involvement in the medicinal cannabis business but remains as a major shareholder. Greenfern’s share price was unchanged at 8.8c.

New Talisman Gold Mines, unchanged at 0.003c, announced a one for 10 share consolidation, effective from February 8.

Smiths City Group, in receivership since May 2020 and now called Ex SCGL, will be delisted from the NZX on February 9.