Market close: NZ shares finish week strong but will be tested next week

A stream of data next week will test the New Zealand sharemarket with net migration figures (Monday), house sales (Tuesday) and GDP (Thursday) to be released. Photo / NZME

The New Zealand sharemarket had a strong close with a rise of more than half a per cent – but its direction will be fully tested next week with a flow of data that will give investors a strong indication of where the economy is sitting.

After a lunchtime dip the S&P/NZX 50 Index gathered pace and finished at 11,757.77, up 79.83 points or 0.68 per cent after reaching an intraday low of 11,618.77. The index increased 1.1 per cent for the week, and it is down nearly 10 per cent so far this year.

Trading was again light with 26.87 million shares worth $98.82 million changing hands, and there were 81 gainers and 45 decliners over the whole market.

Shane Solly, portfolio manager for Harbour Asset Management, said, "We have a busy week of macro-economic data coming up and investors were sitting on their hands waiting for that. Markets always wait for something."

New Zealand's latest net migration figure will be released on Monday, followed by national house sales on Tuesday and gross domestic product on Thursday.

The August consumer price index will be known in the United States mid-week and annual inflation is expected to fall to 8.1 per cent, from 8.5 per cent in July, and the markets there have already priced in another 75 basis points rise in interest rates from the Federal Reserve the following week.

Federal Reserve chairman Jerome Powell said officials were committed to fighting inflation until the job is done.

Solly said it is short-term pain for long-term gain, but "every time you see inflation data points falling it's good for stocks and their recovery".

ANZ Research downgraded its forecast for the second quarter gross domestic product growth to 0.4 per cent, from the previous 1 per cent and well below the Reserve Bank's prediction of 1.8 per cent.

The bank said lingering Covid disruption is meeting the ongoing "normalisation" as services exports (international education and tourism) start to recover and domestic demand softens on the back of monetary tightening.

Fonterra Shareholders' Fund stole the limelight, rising 13c or 4.33 per cent to $3.13 after the dairy co-operative announced it was upgrading its 2023 earnings guidance to 45c-60c a share, up from 30c-45c. Milk collections are forecast to decline slightly to 1.495 billion kgMS, from 1.51 billion kgMS.

There was strength in the leading stocks. Fisher and Paykel Healthcare continued to recover, gaining 28c to $20.20. Auckland International Airport picked up 9.5c to $7.695; Contact Energy increased 14c to $7.95; Mercury added 10.5c to $6.155; Ebos Group collected 56c to $39.99; and Freightways gained 24c or 2.31 per cent to $10.65.

Port of Tauranga was up 13c or 1.97 per cent to $6.73; Ryman Healthcare increased 25c or 2.77 per cent to $9.27; Summerset Group also improved 25c or 2.29 per cent to $11.15; and ANZ Banking was up 58c or 2.28 per cent to $26.

Other gainers were Vital Healthcare Property Trust, up 3c to $2.76; Serko adding 5c to $3.70; Sky TV increasing 5c or 2.13 per cent to $2.40; Eroad rising 6c or 4.05 per cent to $1.54; Bremworth improving 2c or 3.57 per cent to 58c; and Radius Residential Care up 2c or 5.97 per cent to 35.5c.

Tower, up 1.5c or 2.46 per cent to 62.5c, has signed a partnership agreement with Ray White Real Estate for its insurance products and digital customer experience. Tower said gross written premium from its partnership business increased 33 per cent to $50m over the past 10 months.

Winton Land tumbled 16c or 5.95 per cent to $2.53; PGG Wrightson was down 14c or 3.14 per cent to $4.32; Smartpay declined 2c or 2.94 per cent to 66c; and Trade Window decreased 3c or 4.41 per cent to 65c after reaching a high of $2.80 on January 5.

Other decliners were Hallenstein Glasson, down 8c to $5.20; NZME shedding 3c or 2.26 per cent to $1.30; and My Food Bag declining 2c or 3.28 per cent and hitting a new low of 59c.

Transtasman online personal lender Harmoney was up 1c to 76c after telling the market it will delist from the NZX because of low levels of trading in its shares and concentrate on the Australian ASX market.