Market close: Blue chips lead NZ sharemarket to welcome gain

Meridian reported a 3.1 per cent increase in retail sales volume in April and the stock climbed almost 5 per cent. Photo of Benmore dam / Supplied

A group of blue chip stocks – all household names – sprang to life and completed the heavy lifting to push the New Zealand sharemarket to a welcome gain of more than 1 per cent.

Following a strong rebound on Wall Street, the S&P/NZX 50 Index climbed steadily all day, closing at 11,258.28 – up 120.40 points or 1.08 per cent. It was the highest single-day rise in three weeks.

There were 94 gainers and 37 decliners over the whole market on steady volume of 35.59 million share transactions worth $151.38 million.

Greg Smith, head of retail with Devon Funds Management, said there were stronger-than-expected retail sales in the United States – up 0.9 per cent in April – and despite inflation consumers were quite resilient.

"The same applies in New Zealand. Everyone has been worried about a recession, justifiably so with rising interest rates, but wages have also been increasing," Smith said.

"We have seen a big sell-off in high-quality blue chip names, maybe unfairly in some cases, and we are seeing some bargain hunting."

On Wall Street, the Nasdaq Composite rose 2.76 per cent to 11,984.52 points; S&P 500 was up 2.02 per cent to 4088.85; and Dow Jones Industrial Average increased 1.34 per cent to 32,654.59.

The S&P 500 has just been through a six-week losing streak, the longest since 2011; and the Dow Jones had fallen for seven successive weeks, the longest weekly slide since 2001.

At home, the established companies made their moves.

Fisher and Paykel Healthcare was up 27c to $21.05; Mainfreight gained $1.64 or 2.26 per cent to $74.10; Freightways increased 20c or 1.85 per cent to $11; and Skellerup Holdings rose 21c or 4.04 per cent to $5.41.

Chorus improved 17c or 2.35 per cent to $7.40; Contact Energy collected 22c or 2.91 per cent to $7.77; Mercury gained 6c to $5.83; and Meridian rose 21c or 4.73 per cent to $4.65. Genesis gained 4c or 1.5 per cent to $2.71.

Meridian reported a 3.1 per cent increase in retail sales volume in April compared with the same month last year. Meridian said Transpower had corrected its transmission pricing calculation and the revised indicative numbers show a $14m a year cost saving for Meridian.

Retirement village operators Summerset Group Holdings increased 16c to $10.71; Ryman Healthcare rose 21c or 2.32 per cent to $9.25; and Oceania Healthcare was up 3c or 3.09 per cent to $1.

Fletcher Building, up 6c to $5.91, has completed its $273.5m buy-back of 41.21m shares, 5 per cent of the issued capital. Fletcher now has 783.04m shares on issue.

Tourism Holdings increased 7c or 2.69 per cent to $2.67; Steel & Tube rose 7c or 5.11 per cent to $1.44; Michael Hill International was up 54c or 3.42 per cent to $1.21; Pacific Edge collected 3c or 3.75 per cent to 83; and Pushpay Holdings improved 3c or 2.48 per cent to $1.24.

Ebos Group was down 20c to $39.10, and Eroad fell 19c or 6.88 per cent to $2.57.

Auckland firm Thorn Law has filed a High Court class action against a2 Milk for allegedly breaching disclosure obligations between August 19, 2020 and May 9 last year. There are two legal proceedings in Australia for the same period. The a2 Milk company told the market it will vigorously defend the proceedings, and its share price was up 1c to $4.59.

Infratil's chairman Mark Tume is retiring on May 30 after joining the board in 2007 and will be replaced by Alison Gerry, who has chaired the audit and risk committee since 2014. Infratil's share price increased 10.5c to $7.90.

Online travel booking firm Serko fell 20c or 4.26 per cent to $4.50 after reporting a net loss of $36m, an increase of 22 per cent, on revenue of $18.9m, up 12 per cent, for the year ending March. Booking volumes rose 67 per cent to 1.15m. Average monthly cash burn for six months to March was $3m, lower than the guidance of $4m.

Argosy Property gained 4c or 3.33 per cent to $1.24 after reporting a slight decrease in rental income to $105.1m and net profit to $236.2m for the year ending March. Net tangible assets (NTA) per share rose to $1.75, from $1.53 and annual revaluation of its $2.2 billion portfolio increased 8 per cent to $163m. Argosy is paying a fourth quarter dividend of 1.6375c a share on June 22.

Investore, specialising in large format retail buildings, gained 4c or 2.67 per cent to $1.54 after slightly increasing rental income to $58.27m but net profit was down $43.1m to $118.16m for the year ending March because of a lower revaluation movement. NTA was up 24c to $2.32 and Investore is paying a fourth-quarter dividend of 1.975c a share on June 2.