"The capital markets are saying we can see price increases by businesses because of increased import and labour costs and they will be passed on," said Solly.
The bank said it would look though at current inflation pressures, with these largely being driven by temporary factors, including supply chain disruptions and high oil prices.
Of more concern to the market was the continuing rise in the leading energy stocks – Contact was up 24c or 3.26 per cent to $7.61 on trade worth $28.4m, and Meridian increased 26c or 4.49 per cent to $6.05 on trade worth $30.6m.
Solly said the market was becoming baffled by "the wrong way trades" as the two iShares Global Clean Energy exchange traded funds complete their selling and rebalance their weightings in Contact and Meridian by Friday.
"Their prices are going up and they should be going the other way," he said. "The market is wondering what is going on – have the funds already pre-positioned themselves and how much trading is remaining. We are now in the thick of the rebalancing and we will see how things go over the next two days."
Synlait Milk rose 13c or 3.8 per cent to $3.55; Infratil increased 11.5c to $7.01; Scott Technology climbed another 10c or 4 per cent to $2.60; Argosy Property was up 6c or 3.53 per cent to $1.51; and Vista Group picked up 9c or 3.95 per cent to $2.37.
The a2 Milk Company continued to recover, rising 6c to $8.95. A new North America scientific study from Purdue University suggested that A2 milk may cause fewer symptoms of lactose intolerance.
Arvida rose 6c or 3.53 per cent to $1.76 following a report outlining the growth opportunities in the aged care sector; but Ryman Healthcare fell 14c to $14.86.
Pushpay Holdings, which developed an online donor management system for churches, rebounded 5c or 2.59 per cent to $1.98 after being told by a broker that it didn't make the most of its opportunities in the United States last year.
Market leader Fisher and Paykel Healthcare keeps rebounding, this time down 6c to $33.33; and Fletcher Building declined 10c to $7.01.
Manuka honey producer Comvita fell 7c or 2.10 per cent to $3.26 a day after upgrading its full-year operating earnings forecast.
Software-as-a-service firm Geo was subject to a price enquiry from the NZX's NZ RegCo and it said it was complying with continuous disclosure obligations. Geo's share price rose 1.2c or 10.26 per cent to 12.9c, an increase of 27.5 per cent since March 24.
On Wall Street overnight, the Dow Jones Industrial Average fell slightly to 33,677.27 points after US health regulators called for a pause in administering the Johnson & Johnson coronavirus vaccine after it was linked to a small number of cases of a rare type of blood clotting.
But the technology-driven Nasdaq Composite gained 1.05 per cent to 13,996.10 on the back of rises by Apple, Amazon.co, Microsoft and Adobe.
