Market Close: Passive funds dominate NZ sharemarket

The S&P/NZX50 index slipped 0.25 per cent to 13333.93 points on turnover of 73m shares worth $200.5 million.

Passive funds were again the dominant theme of the New Zealand sharemarket today with Contact Energy the main beneficiary owing to its top ten position in the S&P Global Clean Energy Index.

At one point Contact traded through $10, continuing its strong run along with Meridian Energy - another Clean Energy ETF constituent.

Contact ended the day at $9.90, up 22c, or 2.27 per cent, while Meridian slipped back 6c to $8.53 following the previous day's 15 per cent surge in the stock.

The two companies have been on the end of a buying spree from the Nasdaq-listed exchange traded passive fund since October.

"The sort of money coming into these stocks has been extraordinary," said Blair Knight, co-head of sales trading at Craigs Investment Partners.

"Locals have been selling into this strength ... a lot of them were overweight but they have probably sold their bullets too early and don't want to sell anymore. Plus, you have a lot of people away on holiday so not all the sellers are around and all of sudden these shares get pushed higher.

"It's pretty extreme. People are starting to get a bit frustrated and think it is just madness, but sometimes the inflows of these ETFs are just too big for the actual underlying stocks it has these sort of consequences."

Contact's gains weren't enough though to pull the New Zealand sharemarket into positive territory.

The S&P/NZX50 index slipped 0.25 per cent to 13333.93 points on turnover of 73m shares worth $200.5 million.

While Contact and Meridian remain in focus, Genesis Energy also had a good day with its stock closing up 15c, or 4 per cent, at $3.85 and Mercury NZ gained 25c, or 3.7 per cent to $7.

Church technology service PushPay saw 16m shares traded but closed down 3c at $1.82.
Knight said the volume was driven by offshore investors following the recent sell-down by co-founder Chris Heaslip.

The a2 Milk Company drifted lower, closing down 4.27 per cent at $11.65 having rallied at the end of last year. The company last month said its sales would be affected by Covid-19 disruption of the important daigou trading channel in Australia.

Among other notable decliners, Cavalier Corp fell 2.53 per cent to 38c, PGG Wrightson was down 2.1 per cent at $3.26 and retailer Briscoe Group fell 1.35 per cent to $5.13.

On the upside, Summerset rose 1.6 per cent to $12.7, The New Zealand Refining Company gained 3c or 5.56 per cent to 57c and Rakon was up 4.92 per cent to64c.

Outside the main index, Marlborough Wine Estates Group climbed 10.87 per cent to 51c.

Kiwi cervical cancer screening company TruScreen climbed 12.6 per cent to 10c on the NZX after debuting on the ASX having previously raised $2m in a compliance IPO ahead of its dual listing.

IkeGPS gained another 3c to $1.20 following Tuesday's announcement of a deal to buy certain assets of Visual Globe's AI platform.

Meanwhile, Wall Street stock futures and several Asian equity indices fell as results flowed in from Georgia's run-off elections, which will determine control of the US Senate.