Market close: NZ stocks continue to drift while Australian Reserve Bank keeps cash rate on hold

The S&P/NZX 50 Index ended the day lower.

The New Zealand sharemarket continued to drift sideways while the Australian Reserve Bank kept its cash rate on hold but was still talking tough.

The S&P/NZX 50 Index closed at 11,356.99, down 10.81 points or 0.10 per cent, and the S&P/ASX 200 had declined 0.96 per cent to 7056.6 points at 6pm NZ time.

There were 50 gainers and 78 decliners on the NZX main board, again featuring light trading with 22.42 million shares worth $79.03 million changing hands.

The Australian Reserve Bank lifted the cash rate by 25 basis points last month to a 12-year high because the progress in bringing inflation back to the target range of 2-3 per cent by the end of 2025 was looking slower than earlier forecast.

The central bank this month kept the rate at 4.35 per cent, as expected, but said there were still significant uncertainties around the economic outlook.

It remained resolute in its determination to return inflation (running at 4.9 per cent) to the target and will do whatever is necessary to achieve that outcome.

Greg Main, Jarden Wealth Management adviser, said there is still some tension in the markets over where interest rates will land – and whether the Federal Reserve will cut rates next year.

“It is more a macro-economic picture at the moment and the markets are dancing around what central banks will do,” he said. “If the US does cut, there will be implications over where money is allocated.

“The US has had a rally but the New Zealand and Australian markets have been a bit divergent – up and down, flat and all around.”

US stocks slipped on Monday night as investors questioned whether the markets are getting too far ahead of themselves following five straight winning weeks.

As the US major indices took a breather, alternative investments rallied. Gold hit an intraday all-time high of US$2100 an ounce before settling at US$2033.90.

Bitcoin went over US$41,000 ($66,628) to notch a 19-month high and 150 per cent rise this year. Bitcoin went from US$18,000 at the start of the Covid pandemic to more than US$110,000 in November 2021, but fell back with the series of Federal Reserve interest rate hikes and the collapse of FTX, one of the biggest crypto companies.

The ANZ World Commodity Price Index fell 1.3 per cent in November, ending the recent run of stronger prices. Food commodity prices generally fell while prices for logs and aluminium improved.

At home, Gentrack and Turners Automotive, soon to join the NZX top 50, lost some ground from the day before and declined 16c or 2.43 per cent to $6.42 and 6c to $4.74 respectively.

Synlait Milk and Pacific Edge, both going out of the top 50, continued to fall, down 6c or 4.84 per cent to $1.18 and 0.004c or 4.08 per cent to 9.4c.

Mainfreight, falling as low as $56.30 on September 25, is speeding down the recovery road, rising $1.18 or 1.73 per cent to $69.25. Another market leader Ebos Group was up 39c to $37.71.

Insurer Tower gained 3c or 5.17 per cent to 61c after announcing a review of its ownership. Vital Healthcare Property Trust was up 6c or 2.93 per cent to $2.11.

NZME increased 3c or 3.57 per cent to 87c; Sanford was up 7c or 1.87 per cent to $3.82; Ventia Services also added 7c or 2.33 per cent to $3.07; and Accordant Group rebounded 2c or 2.15 per cent to 95c.

SkyCity declined 6c or 3.19 per cent to $1.82; a2 Milk was down 7c to $4.22; Serko shed 21c or 4.92 per cent to $4.06; Green Cross Health fell 7.5c or 7.11 per cent to 98c; Heartland Group decreased 4c or 2.44 per cent to $1.60; and Arvida Group was down 2c or 2.04 per cent to 96c.

Restaurant Brands was down 15c or 3.66 per cent to $3.95; Vista Group declined 6c or 4.14 per cent to $1.39; Comvita shed 5c or 2.04 per cent to $2.40; and Smartpay decreased 4.5c or 3.21 per cent to $1.355.