Jeremy Sullivan, investment advisor with Hamilton Hindin Greene, said “we’ve had a gentle start to the year after the strong rally at the end of last year.
“People are watching the developments out of the Middle East and what they will do to inflation and interest rates. All eyes will be on the New Zealand consumer price index next week – it will be four months since we’ve had inflation data.”
Sullivan said freight rates have increased 150 per cent over the past two weeks and this could have an impact on (global) inflation.
Shipping lines are charging more for container movements as their vessels take the longer route around the southern Africa Cape of Good Hope, bypassing the Red Sea and Suez Canal because of safety concerns following a spate of attacks by Houthi militants.
Back home, the New Zealand Institute of Economic Research’s Quarterly Survey of Business Opinion revealed that confidence rose sharply in the final three months of last year.
A net 10 per cent of respondents expected economic conditions to worsen this year compared with 49 per cent in the September quarter survey.
A net 6 per cent of firms reported an increase in their own trading activity in the December quarter, and a similar portion felt positive about their activity in the upcoming quarter.
ANZ Research said the labour market indicators were a mixed bag, with hiring intentions increasing but labour now much easier to find, as immigration has soared.
After many stubborn quarters, pricing and cost measures fell meaningfully, but do not yet look consistent with inflation back in the Reserve Bank’s target band.
“Overall, the Reserve Bank will be pleased to see the decline in direct inflation indicators, but wary of the forward-looking indicators that suggest a risk that the economy may be getting a second wind before the inflation-fighting job is done,” ANZ Research said.
Fisher and Paykel Healthcare dragged the market down, falling 38c to $23.56, while Fletcher Building declined 9c or 1.88 per cent to $4.69.
Vulcan Steel was down 32c or 3.88 per cent to $87.93; Serko shed 15c or 3.57 per cent to $4.05; a2 Milk declined 7c to $4.29; Seeka decreased 6c or 2.4 per cent to $2.44; Rakon gave up 6c or 4.58 per cent to $1.25; and Allied Farmers fell 4c or 4.76 per cent to 80c.
Retail and property stocks had a stronger day. Hallenstein Glasson increased 20c or 3.68 per cent to $5.64; The Warehouse gained 4c or 2.56 per cent to $1.60; Briscoe Group was up 6c to $4.68 but Michael Hill was down 2c or 2.11 per cent to 93c.
In the property sector, Goodman Trust was up 6c or 2.73 per cent to $2.26; Precinct gained 3c or 2.38 per cent to $1.29; and Kiwi added 1.5c to 87.5c.
Contact Energy increased 17c or 2.13 per cent to $8.17; Mainfreight collected 27c to $71.27; Freightways gained 14c to $8.60; Ryman Healthcare was up 10c to $5.95; Skellerup added 6c to $4.88; and Heartland Group improved 4c or 2.82 per cent to $1.46.
New Zealand King Salmon Investments gained 1c or 3.77 per cent to 27.5c after telling the market it has received “a positive aquaculture decision” from Fisheries New Zealand for its proposed Blue Endeavour open ocean farm in Cook Strait.
Tower, unchanged at 61c, is selling its Vanuatu business to Capital Insurance Group of Papua New Guinea for $1.6m. The Vanuatu subsidiary generated $6.8m gross written premiums and had a net loss of $5.3m for the year ending September. It has assets of $2.2m.
Cooks Coffee Company, down 1c or 5.88 per cent to 16c, reported a 15.8 per cent increase in UK and Ireland store sales to $53.8m for the last calendar year.
