But core inflation, excluding falling gas prices, is still persistent at 5.3 per cent and the feeling is interest rates will need to stay higher for a little longer, with the Federal Reserve expected to increase rates a further 25 basis points next month.
Investors have looked elsewhere. Gold is in a happy place, trading at US$2017.07 an ounce and bouncing back from US$1815.10 on March 8. Bitcoin increased 0.73 per cent to US$48,455.84 after starting the year at US$26,130.48.
Jeremy Sullivan, investment advisor with Hamilton Hindin Greene, said markets are digesting whether inflation has peaked.
“It’s steady as she goes while the key inflation data comes through. In New Zealand, wholesale interest rates have been falling in the past month, and I’d expect one further hike by the Reserve Bank and then it’s all downhill from there,” he said.
“That’s what the market is pricing in – there will be a softening in inflation by the end of the year and interest rates will fall relatively steeply. And there’s serious value to be seen on the market, with the retirement and property sectors thinking they would never see lower rates again.”
Sullivan said property trusts are trading at a 30 per cent discount or more to net tangible assets. With higher rents and falling interest rates in a year, their asset values can only increase.
Ebos Group, up 80c or 1.78 per cent to $45.80, and Mainfreight, gaining 54c to $70.99, led the market higher. Vector increased 11c or 2.78 per cent to $4.06.
Restaurant Brands, a volatile stock, increased 25c or 3.82 per cent to $6.80; Chorus added 6c to $8.61; SkyCity improved 5c or 2.08 per cent to $2.45; Infratil gained 7c to $9.42; and Vital Healthcare Property Trust was up 4c to $2.33.
In the retirement village sector, Ryman Healthcare was up 6c to $5.39; Arvida Group increased 2c or 2.02 per cent to $1.01; and Summerset Group was down 10c to $8.40.
Other gainers were Heartland Group up 3c or 1.91 per cent to $1.60; Pacific Edge adding 1.5c or 3.45 per cent to 45c; and Eroad improving 3c or 5.17 per cent to 61c.
Napier Port shed 10c or 3.85 per cent to $2.50; Freightways was down 17c or 1.81 per cent to $9.21; a2 Milk declined 7c to $6.17; Auckland International Airport decreased 8c to $8.60; and Genesis Energy was down 6.5c or 2.34 per cent to $2.71.
Other decliners were Michael Hill down 3c or 2.75 per cent to $1.06; Gentrack falling 12c or 3.69 per cent to $3.13; Rakon shedding 2c or 2.3 per cent to 85c; Steel & Tube decreasing 2c or 1.82 per cent to $1.08; and NZ Oil & Gas down 2c or 5.26 per cent to 36c.
Carbon Fund continued a strong recovery, up 6c or 3.16 per cent to $1.96. Marlin Global Fund gained 2c or 2.38 per cent to 86c; Smartpay increased 4.5c or 3.56 per cent to $1.31; Green Cross Health added 3c or 2.19 per cent to $1.40; and CDL Investments was up 3c or 4 per cent to 78c.
Channel Infrastructure, down 1c to $1.52, told the market that 55 million litres of private storage is now available at Marsden Point and the decommissioning of the refinery will be completed during the second quarter, with conversion costs on track and $145m having been spent.
Fuel throughput was 810 million litres in the first quarter ending March compared with 800 million litres in the previous quarter, and aviation supply continues to recover.
Medicinal cannabis company Cannasouth gained 1c or 3.45 per cent to 30c after announcing the shareholder meeting to approve the merger with Katikati-based Eqalis will be held on April 28. Cannasouth is planning to raise $9m in new capital.
Chatham Rock Phosphate, down 1c or 4.76 per cent to 20c, is proceeding with a $4.62m capital raise through a private placement of up to 30m units at 15.4c a unit.
