Leading blue-chip stocks come off the boil - Market close

Mainfreight was down 39c to $73.40 when the market closed on Friday.

The New Zealand sharemarket took an end-of-the-week breather after a strong start to the month, with leading blue-chip stocks coming off the boil.

The S&P/NZX 50 Index fell in the morning, traded steadily in the afternoon and then had a late rise in the matching session (on portfolio rebalancing) to close at 12,832.55, up 12.27 points or 0.1%.

The index gained more than 1.3% for the week, 2.6% for the month so far and has increased 8.6% for the year.

There were 78 gainers and 62 decliners on the main board with 38.11 million shares worth $148.8m changing hands.

Shane Solly, portfolio manager with Harbour Asset Management, said the local market has just come off a 32-month high following “a pretty average and tough reporting season”.

“There were far more earnings misses and forecast downgrades than expected. The market rightly took a bit of a breather.”

Solly said the BusinessNZ Performance of Manufacturing Index entered its 18th straight month of contraction (below 50), though the index for August increased to 45.8 from 44.4 in July.

“There’s still pain in the economy but maybe it’s not as bad. It’s still too early to pick a recovery in the broader economy. The REINZ data in August showed houses are still down, allowing for inflation, but the rate of price falls has slowed.

“Again, it’s still too early for the interest rate cuts to kick in, and the housing market continues to be a sticking point for the real estate-influenced stocks such as Fletcher Building, Winton Land and retirement village companies,” Solly said.

Overseas, Wall Street was higher on the back of growing expectations for a 0.5% interest rate cut by the Federal Reserve, the European Central Bank reduced its official rate 25 basis points to 3.5% on weak Eurozone growth, and gold reached an all-time high of US$2569 an ounce, up 2.06%.

The Dow Jones Industrial Average went over 41,000 points, gaining 0.58% to 41,096; S&P 500 was up 0.75% to 5595.76; and Nasdaq Composite increased 1% to 17,569.68.

Across the Tasman, the S&P/ASX 20 Index neared its all-time high of 8148.7 points, having gained 0.34% to 8103 points at 5.45pm NZ time.

At home, Fisher and Paykel Healthcare was down 10c to $38.50; Infratil declined 19c to $12.21; Ebos Group shed 20c to $36.36; Mercury Energy eased 8.5c to $6.155; and Mainfreight was down 39c to $73.40.

Manawa Energy fell 13c or 2.41% to $5.27 as the market questioned the certainty of the takeover by Contact, which was down 2c to $8.30.

Winton Land declined 8c or 4.3% to $1.78; Fletcher Building was down 5c to $2.76; and Ryman Healthcare eased 5c to $4.70.

Meridian Energy gained 15c or 2.41% to $6.38 after reporting increased levels of hydro storage following recent rain. In the month to September 9, national storage rose from 45% to 99% of the historical average.

South Island storage increased to 104% of average and North Island was up to 82%. Meridian’s August monthly total inflows were 119% of the historical average, and its retail sales volumes were down 3.2% compared with August last year.

SkyCity Entertainment, up 1c to $1.43, has appointed Avril Baynes managing director Adelaide.

Skellerup increased 13c or 2.73% to $4.90; Delegat Group gained 23c or 4% to $5.98; Ventia Services was up 15c or 3.23% to $4.80; Blackpearl Group rose 12c or 8.7% to $1.50; Fonterra Shareholders’ Fund added 13c or 2.83% to $4.72 on a broker’s upgrade; and Synlait was up 1.5c or 3.61% to 43c.

Pacific Edge was up 0.006c or 5.83% to 10.9c after updating the market on its drawn-out application to continue receiving Medicare payments for its Cxbladder tests in the United States.

Medicare has granted an extension to deliberations on the local coverage determination so that contractor Novitas had time to respond to a large volume of detailed comments – the determination raises unique issues. In the meantime, Pacific Edge continues to receive reimbursement for its testing.

WasteCo was down 0.003c or 8.33% to 3.3c. The company told shareholders at its annual meeting it was having constructive discussions with Kiwibank over resetting its lending facility and terms, after earlier saying it had breached a quarterly banking covenant.

Promisia Healthcare, unchanged at 0.001c, is selling its Eileen Mary care facility in Dannevirke to The Masonic Villages Trust for $6.1m.