NZ sharemarket follows Wall St higher, Mainfreight jumps 6%

The New Zealand sharemarket got a 1.7% boost on Thursday after Wall Street’s pleasant surprise from the US central bank.

The benchmark S&P/NZX50 Index closed up 193 points at 11,328, its highest since June 3. It followed a 0.2% slip on Wednesday, which was its third decline in a row this week.

“Obviously a pretty good day on the market following the US last night, which finished the day pretty strongly on relatively doveish comments from the US Federal Reserve,” said Hamilton Hindin Greene investment adviser Grant Davies​.

The US central bank lifted its benchmark interest rate three-quarters of a point, as expected, in its battle against inflation.

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But comments from Fed chair Jerome Powell that the Fed’s rate hikes had already had some effect were taken as a sign that its moves may not be so aggressive in future.

In response, the S&P 500 climbed 2.6% to 4023.61. The tech-heavy Nasdaq surged 4.1%, its biggest gain in over two years, to 12,032.42, and the blue chip Dow Jones Industrial Average rose 1.4% to 32,197.59.

“Obviously rates are going up, but the market may be starting to factor in they might not go up as much as currently expected,” Davies said.

“So at the moment there’s a little bit more optimism, but obviously still plenty of data points to navigate over the next few months at least.”

Blue chip freight company Mainfreight closed up 6.3% at $75.50 after an upbeat update at its annual meeting on Thursday, with revenue and pre-tax profit up significantly for the past 16 weeks.

“A good update from Mainfreight given there’s been a little bit of uncertainty in the market over the last few months regarding what’s going on with shipping and the likes,” Davies said.

Mainfreight had previously closed its Russian business, at a cost of €1.5m (NZ$2.47 million), following Russia’s invasion of Ukraine, and chair Bruce Plested​ had some harsh words about the war during Thursday’s meeting.

“It is difficult to comprehend that the bloated egos of a few can cause the death of thousands of innocent people, and the destruction of billions of dollars of infrastructure,” he told shareholders.

Plested also said that 2022 was only marginally easier to operate in than 2021, partly thanks to Covid, with “changeable and trying conditions”.

Elsewhere on the market. Meridian Energy was up 1.8% at $4.90, Fisher & Paykel Healthcare gained 1.9% to $21.30, Auckland Airport rose 1.8% to $7.33, Spark was up 0.6% at $5.04, and Mercury Energy gained 0.9% to $5.98.

Retirement village operator Ryman Healthcare jumped 4% to $9.16 after its annual meeting, also on Thursday.

“Ryman have had a pretty tough 12 months dealing with rising interest rates like everybody else, but also wage pressures, and obviously Covid at the same time,” Davies said.

“The demographics of Ryman’s businesses are still pretty positive in the long run, we have an ageing population and there’s still plenty of demand for the villages currently … and there’s still no doubt demand to follow.”

Jeweller Michael Hill International had the biggest rise on Thursday, its shares up 6.4% at $1.09.

Of the 185 stocks traded, 98 rose and 42 fell.

In Australia, the benchmark S&P/AXS200 Index was up 0.9% at 6889.7 in late afternoon trading, while shares were mostly higher in across Asia.

On Wall Street, shares in Microsoft and Google parent Alphabet rose 6.7% and 7.7%, respectively, after their latest quarterly reports.