Market close: NZ shares feed off Wall Street's big turnaround

The New Zealand sharemarket gained half a per cent. Photo / NZME

The New Zealand sharemarket, gaining half a per cent, fed off another big turnaround on Wall Street instead of worrying too much about local inflation remaining stubbornly high.

The S&P/NZX 50 Index closed at 10,847.34, up 61.42 points or 0.57 per cent, though it drifted later in the day after a 1 per cent gain with an intraday high of 10,927.32.

There were 86 gainers and 46 decliners on the main board and volume improved with 28.09 million share transactions worth $111.35 million.

Matt Goodson, managing director of Salt Funds Management, said the day here was dominated by an ugly inflation outcome.

Annual inflation is now running at 7.2 per cent, down slightly from 7.3 per cent, while non-tradeables (core) inflation hit a record high of 6.6 per cent, up from 6.3 per cent.

Goodson said the September quarter consumer price index increase of 2.2 per cent was well above the consensus estimate of 1.5 per cent. "We expect the official cash rate (OCR) will now rise to 5 per cent (from the current 3.5 per cent).

"The latest numbers may well be the peak of inflation with shipping rates and rental prices coming off highs. But wage price pressures mean there is still a lot of work to do to get inflation back to the 1-3 per cent band.

"Our fear is that it will take some time to return to the top inflation range of 3 per cent," Goodson said.

Bank economists were now predicting a 75 basis points rise in the OCR by the Reserve Bank next month and even in February.

Global markets, however, were buoyed by the strong rises in the United States, with the technology-driven Nasdaq Composite having its biggest single-day gain since July, rising 3.43 per cent to 10,675.8 points.

The Dow Jones Industrial Average increased 1.86 per cent to 30,185.82 points, and S&P 500 was up 2.65 per cent to 3677.95 – spurred on by better-than-expected bank earnings and the U-turn on tax policy by the UK government.

Across the Tasman, the S&P/ASX 200 Index was up 1.78 per cent to 6783.2 points at 5.45pm NZ time.

At home, Fisher and Paykel Healthcare provided weight, rising 47c or 2.47 per cent to $19.52; Auckland International Airport was up 9.5c to $7.18; Spark gained 9c to $5.18; and Fletcher Building increased 14c or 2.91 per cent to $4.95.

Air New Zealand rose 3c or 4.05 per cent to 77c; Restaurant Brands was up 16c or 2.19 per cent to $7.46; SkyCity added 7c or 2.66 per cent to $2.70; Heartland improved 4c or 2.45 per cent to $1.67; Scales Corp rebounded 10c or 2.19 per cent to $4.67; and Port of Tauranga increased 8c to $6.18.

New mayor Wayne Brown sent a letter to Ports of Auckland instructing the company to investigate ways to clear Bledisloe Wharf of the parked cars and return the area to public use. Port of Tauranga and Northport's owner Marsden Maritime Holdings, rising 27c or 4.54 per cent to $6.22, had earlier intimated interest in taking up the car imports slack.

Automation manufacturer Scott Technology gained 9c or 3.33 per cent to $2.79 after reporting a 50 per cent increase in operating net profit to $12.65m on revenue of $221.75m, up 8 per cent, for the 12 months ending August. There was, however, a $12.6m write-off from the discontinued Robotworx operation.

Scott's meat, materials handling, and logistics and mining technology businesses provide 75 per cent of group revenue and 90 per cent of margin. It has a record $190m forward work, and is paying a final dividend of 4c a share on November 22.

Manawa Energy (formerly Trustpower) was down 6c to $5.29 after downgrading its full-year operating earnings (ebitdaf) to $127.5m-$140m, from the earlier guidance of $140m-$160m because of a challenging first half of fluctuating prices and hydro inflows. The latest guidance includes new generation development expenditure of $6m-$8m).

PGG Wrightson decreased 5c to $4.05 after telling the market it is forecasting operating earnings (ebitda) of about $62m for the 2023 financial year, down from $67.2m in 2022.

Among other decliners, Briscoe was down 15c or 2.91 per cent to $5; Skellerup shed 12c or 2.35 per cent to $4.98; Vector decreased 11c or 2.68 per cent to $3.99; and Genesis lost 5c or 1.87 per cent to $2.63.

Small cap stocks had lively days after providing strong updates.

Online personal lender Harmoney, up 4c or 5.41 per cent to 78c, told the market that loan originations rose 42 per cent in the first quarter of the 2023 financial year compared with the same period last year. The group loan book increased 9 per cent to A$635m ($705.47m) from the fourth quarter of the 2022 financial year.

Smartpay Holdings, increasing 5.5c or 7.97 per cent to 74.5c, reported a 161 per cent rise in Australian transactional revenue for the year ending September, and consolidated revenue was up 91 per cent. Transacting retail terminals totalled 12,546 including 1600 new customers in Australia.

Utilities software firm ikeGPS rose 7c or 8.33 per cent to 91c after reporting positive cash flow of $2.2m and $1.1m in the first two quarters of the 2023 financial year. The first half revenue was $15.4m, up 170 per cent on the same period last year. The company expects $8m-$11m of signed contract work to be delivered in the second half.