Market close: NZ stocks rise on improved business confidence and rise in US growth

In danger of dropping out of the top 50, Restaurant Brands increased 20c or 3.25 per cent to $6.35. Graphic / NZME

A more confident New Zealand sharemarket made a further gain on improved business confidence and better-than-expected economic growth in the United States.

The S&P/NZX 50 Index quickly recovered from an early morning fall and closed at 12,036.05, up 12.58 points or 0.1 per cent after reaching an intraday low of 12,009.55.

There were 62 gainers and 68 decliners on the main board, with 42.55 million shares worth $113.82 million changing hands.

The January ANZ Business Outlook survey showed confidence bounced 18 points from minus 70.2 in December to minus 52, and expected own activity increased 10 points to minus 15.8, from 25.6.

ANZ said business people appear to have come back from holiday in slightly better spirits. “Some of the shock value of the November rate hike and talk of a deliberately engineered recession appears to have worn off, though most indicators remain at very subdued levels,” said chief economist Sharon Zollner.

“However, inflation and pricing pressures remain intense and there’s good reason for the Reserve Bank to keep hiking a while yet.” Zollner is picking a 50 basis points rise in the official cash rate next month.

Greg Smith, head of retail with Devon Funds Management, said the market has moved on from the release of the consumer price index earlier in the week.

“There wasn’t a decline in inflation that people wanted, but at least there weren’t any nasty surprises and there is now a pathway to lower inflation,” he said.

US gross domestic product grew 2.9 per cent in the final quarter last year, ahead of the forecast 2.8 per cent. This raised hopes of a soft economic landing and less worrying recession.

The Dow Jones Industrial Average was up 0.61 per cent to 33,949.41; S&P 500 increased 1.1 per cent to 4060.43; and Nasdaq Composite rose 1.76 per cent to 11,512.41.

The Nasdaq was boosted by an 11 per cent rise in the Tesla share price to US$160.27 ($246.55) after the electric-vehicle maker reported record revenue and solid earnings, with founder Elon Musk predicting the production of two million vehicles this year.

At home, retailers Hallenstein Glasson rose 28c or 5.43 per cent to $5.44, and Briscoe Group was up 18c or 3.97 per cent to $4.71

There is speculation that Hallenstein Glasson, and even Briscoe, may enter the NZX top 50 following the latest review over the next 15 trading days and index rebalancing.

Two stocks in danger of dropping out of the top 50 had strong days – Eroad rose 17c or 19.1 per cent to $1.06, and Restaurant Brands increased 20c or 3.25 per cent to $6.35 after reaching a low of $5.50 earlier this month.

Ryman Healthcare completed one of its better weeks, climbing a further 20c or 3.08 per cent to $6.70, and has risen 15 per cent in four successive trading days. Fellow retirement stock Ocean Healthcare was up 2c or 2.3 per cent to 89c.

Ebos Group gained 14c to $45.22; Freightways added 21c or 2.17 per cent to $9.88; a2 Milk was up 9c to $7.44; Synlait increased 6c or 1.73 per cent to $3.52; Sanford collected 6c or 2.88 per cent to $4.28; and Spark was up 6c to $5.26.

Leading banks ANZ increased 33c to $27.20, and Westpac was up 20c to $26.10.

Burger Fuel rose 1.5c or 5.45 per cent to 29c; ArborGen increased 2.5c or 12.5 per cent to 22.5c; MHM Automation gained 5c or 5.75 per cent to 92c; and New Zealand Oil & Gas was up 4c or 9.52 per cent to 46c.

Market leader Fisher and Paykel Healthcare was down 14c to $25.11; Meridian shed 7.5c to $5.29; Vector declined 9c or 2.02 per cent to $4.37; Chorus dropped 10.5c to $8.335; Gentrack decreased 11c or 3.73 per cent to $2.84; and Pacific Edge was down 1.5c or 3.06 per cent to 47.5c.

Kiwi Property declined 2c or 2.08 per cent to 94c; Geneva Finance fell 6.5c or 13.98 per cent to 40c; PaySauce shed 1.5c or 5.26 per cent to 27c; Accordant Group decreased 5c or 2.98 per cent to $1.63; and Allied Farmers was down 2c or 2.7 per cent to 72c.

Manawa Energy, up 1c to $5.30, reported that third-quarter generation increased 4 per cent to 481GWh compared with the previous corresponding period due to North Island volumes being 35 per cent higher and offsetting the 28 per cent decline in the South Island.

New Zealand Rural Land Company, gaining 1c to $1.06, is next week making presentations in Munich, Luxembourg, Zurich and Geneva to attract European investors.

NZ Rural owns 11,710ha of farmland in the South Island with seven tenants and a 2400ha forestry estate in the Manawatu-Whanganui region. It has assets worth $298.8m and a net asset value of $1.614 per share.