Market close: NZ shares gain in muted response to big day on Wall Street

The S&P/NZX 50 Index has risen 2 per cent in two days. Photo / NZME

The New Zealand sharemarket had a muted response to another big day on Wall Street, weighed down by the fifth successive half per cent rise in the official cash rate (OCR) from the Reserve Bank.

The S&P/NZX 50 Index dipped after the bank increased the OCR to 3.5 per cent with the promise of more to come. The market was a little rattled when it was told that a hike of 75 basis points was considered.

The index, however, recovered slightly late in the day and gained 89.98 points or 0.81 per cent to 11,180.01. The index has risen 2 per cent in two days.

There were 100 gainers and 36 decliners over the whole market, with 26.57 million shares worth $105.41 million changing hands.

The NZ dollar strengthened slightly, trading at US57.37c against the American greenback after reaching an intraday high of US58.07c.

The dollar was also shored up by the news that the government's deficit wasn't as big as expected – coming in at $9.7 billion, instead of the May budget forecast of $19b, because of increased tax revenue.

Matt Goodson, managing director of Salt Funds Management, said the local market slowed after the Reserve Bank indicated it was tossing up between 50 and 75 basis points and it opted for a hawkish 50 basis points.

He said price inflation was now spilling over into wage inflation and "as we know, the bank is staying the course. US futures were down half a per cent and whether the rally continues, we will have to wait and see."

Overnight on Wall Street, the Dow Jones Industrial Average rose another 825 points or 2.8 per cent to 30,316.32 points; S&P 500 increased 3.06 per cent to 3790.93; and Nasdaq Composite was up 3.34 per cent to 11,176.41.

The Dow Jones, now out of the bear market, has risen 5.46 per cent in two days; S&P 500 has increased 5.65 per cent; and Nasdaq Composite was up 5.61 per cent.

The US markets' mood improved on renewed hopes that banking giant Credit Suisse would be able to avoid a financial meltdown as its share price rebounded.

Across the Tasman, the S&P/ASX 200 Index was having another strong day, up 1.69 per cent to 6812.7 points at 6pm NZ time.

At home, Fisher and Paykel Healthcare lifted the market after rising 82c or 4.39 per cent to $19.52 on trade worth $13.28m.

Mercury Energy was up 9.5c or 1.74 per cent to $5.54; Meridian added 5c to $4.78; Fletcher Building increased 12c or 2.46 to $4.99; Ryman Healthcare gained 13c to $8.80; and SkyCity was up 5c or 1.82 per cent to $2.80.

Gentrack rose 9c or 5.88 per cent to $1.62; Vista Group increased 7c or 4.58 per cent to $1.60; Rakon collected 5c or 4.07 per cent to $1.28; Serko added 10c or 3.13 per cent to $3.30; and Foley Wines was up 4c or 2.86 per cent to $1.44.

The leading banks had another strong day, with ANZ gaining 42c to $27.60, and Westpac rising 56c or 2.3 per cent to $24.95.

In the property sector, Goodman Trust increased 4c or 1.96 per cent to $2.08; Argosy was up 2c to $1.21; and Investore was down 3c or 1.94 per cent to $1.52.

Precinct Properties, up 3c or 2.36 per cent to $1.30, has been selected as the preferred development partner with Ngati Whatua Orakei for the Auckland Downtown car park site.

Goodson said Precinct owned property all around the car park and there was the potential for some very significant development further down the track.

Tourism Holdings, up 3c to $2.75, has bought the remaining 51 per cent shareholding in its UK joint venture, Just go Motorhomes, for NZ$10.67m. Tourism Holdings is merging with Apollo Tourism & Leisure which also has a UK business.

Cooks Coffee gained 1.5c or 3.8 per cent to 41c after telling the market it is increasing its number of Esquires and Triple Two cafes in the UK, Ireland and the Middle East from 111 to more than 120 by the end of the year. This includes three new Esquires cafes in London, Northamptonshire and Bedfordshire, taking the total number to 53.

Fast food operator Restaurant Brands hit a new low after falling 44c or 5.61 per cent to $7.41. The stock has been under pressure since it was removed from the FTSE Russell Small Cap index. And then came the announcement that highly-regarded chief executive Russel Creedy and chief financial officer Grant Ellis were leaving the company during the first half of next year.

Seeka, the country's biggest kiwifruit grower, declined 9c or 2.23 per cent to $3.95.

Cannasouth was down 0.005c to 31.5c after earlier telling the market it has received its first shipment of verified cannabis medicines.