Market close: NZ sharemarket loses momentum as investors eye US inflation data

Vulcan Steel rose 18c or 1.80 per cent to $10.18 after kicking off the reporting season in style. Photo / Supplied

Transtasman distributor and processor Vulcan Steel kicked off the reporting season in fine style, but the New Zealand sharemarket lost momentum late in the day as it awaited the latest United States inflation figure overnight.

The S&P/NZX 50 Index reached an intraday high of 12,522.67, but began falling mid-afternoon and closed at 12,413.05, down 20.89 points of 0.17 per cent.

There were 75 gainers and 62 decliners across the whole market of 187 stocks on volume of 44.3 million share transactions worth $199.91 million.

Vulcan Steel, which listed in early November, rose 18c or 1.80 per cent to $10.18 after reporting an 85 per cent increase in net profit to $54 million for the six months ending December compared with the previous corresponding period. Revenue was up 35 per cent to $463m and operating earnings (ebitda) rose 71 per cent to $102m.

Vulcan has lifted its full-year ebitda guidance by 11 per cent to a mid-point of $194m-$204m, from $174m-$184m, and net profit by 15 per cent to a mid-point of $107m-$114m, from $93m-$100m.

Vulcan said it is performing well despite a disrupted environment, and is progressing its strategy for future growth. It is paying an interim dividend of 27.5c a share, totalling $36m, on April 8.

Steel & Tube, in the same business, benefited from the Vulcan result, rising 10c or 6.58 per cent to $1.62.

Dan Stratful, investment adviser with Forsyth Barr, said the local market was trying to drag itself back to life. "It got caught in the United States downturn [in January] through no fault of its own, and it needs a good reporting season to find its own feet.

"Investors are well aware of who is going to report a good result like Vulcan and those who have been Covid affected and won't – like Auckland International Airport, Air New Zealand and SkyCity Entertainment."

He said all eyes would be on the US inflation number and "I expect the New Zealand one will be hotter when it comes out."

Economists in the US are expecting the consumer price index to be up 7.3 per cent on a yearly basis, above December's 39-year high of 7 per cent. The Federal Reserve will start raising interest rates in March but a hotter inflation figure could spark another shares sell-off and lead to a half per cent hike in rates. Tame inflation could fuel a further relief rally in stocks.

The leading US indices, meanwhile, made more gains. The Dow Jones Industrial Average was up 0.86 per cent to 35,768.06; S&P 500 increased 1.45 per cent to 4587.18; and Nasdaq Composite rose 2.08 per cent to 14,490.37. The Nasdaq has increased 4.36 per cent during the past four trading days.

At home, EBOS Group increased 33c to $40.98; a2 Milk gained another 6c to $5.89; Mercury Energy was up 5c to $5.85; and Spark collected 7.5c to $4.57.

Briscoe Group rose 16c or 2.57 per cent to $6.38; The Warehouse Group picked up 9c or 2.8 per cent to $3.30; Freightways gained 10c to $12.50; and Property for Industry increased 5c or 1.79 per cent to $2.845.

NZME was up 4c or 3.2 per cent to $1.29; EROAD gained 14c or 3.13 per cent to $4.61; Ventia Services Group collected 5c or 2.08 per cent to $2.45; and New Zealand King Salmon Investments increased 3c or 3.03 per cent to 51c.

Seafood company Sanford rose 22c or 4.73 per cent to $4.87 after providing an upbeat first quarter update. Overall sales were up 11 per cent compared to the previous corresponding period, though the wildcatch division was down 12 per cent. There's strong demand for Greenshell mussels and salmon, and Sanford is benefiting from higher prices, with wildcatch up 24 per cent.

Rakon gained another 4c or 2.15 per cent to $1.90, after falling to $1.62 in late January. Rakon increased its full-year operating earnings (ebitda) guidance to $49m-$53m, from $44m-$49m, saying it had overcome supply chain pressures.

PaySauce increased 2.5c or 8.77 per cent to 31 after telling the market it has taken over accounting software provider Reckon's payroll.

Market leader Fisher and Paykel Healthcare turned around and closed down 15c to $30.24 on trade worth $21.76m, after reaching an intraday high of $31.

Auckland International Airport fell 15c or 1.99 per cent to $7.38 on trade worth $31.5m; Ryman Healthcare shed 12c to $9.88; Port of Tauranga declined 10c to $6.42; and PGG Wrightson decreased 10c or 1.83 per cent to $5.35.

DGL Group lost 7c or 2.14 per cent to $3.20; Arvida was down 4c or 2.34 per cent to $1.67; and Gentrack dropped 6c or 3.33 per cent to $1.74.