The S&P 500 and Nasdaq Composite indices had posted their second consecutive positive week and best weekly performance since November. The technology-heavy Nasdaq rose 4.82 per cent for the week, S&P 500 advanced 2.67 per cent, and Dow Jones Industrial Average added 2 per cent.
Jeremy Sullivan, investment adviser with Hamilton Hindin Greene, said the softening US inflation data had created quite a positive start to the year for the markets “but there’s still water to go under the bridge”.
“I think the US Federal Reserve will go to smaller interest rate rises of 25 basis points and look to cutting rates at the end of the year or early 20214 – as in New Zealand.”
Sullivan said New Zealand’s December CPI, to be released on Wednesday next week, will be closely watched. “The expectation is that inflation will modestly increase to 7.8 per cent and then begin falling.”
He said wholesale interest rates have been decreasing with the two-year swap rate now at 5.03 per cent, down from a high of 5.42 per cent. “That’s an 8.5 per cent reduction in the forward swap rates and people are starting to feel that inflation is being controlled.”
Across the Tasman, the S&P/ASX 200 Index was up a further 0.84 per cent to 7389.5 points at 6pm NZ time.
At home, a busier Auckland International Airport climbed 16c or 1.96 per cent to $8.31 on trade worth $15.88m – just surpassing the previous high of $8.30 set on November 16 last year.
Sullivan said the airport has made a strong start out of the gate as more people are travelling around the country and overseas. It has a rock-solid balance sheet with debt gearing at 15 per cent on assets worth $10.2 billion after last year completing the largest capital raise on the market of $1.2b.
The airport was well supported in trading by Fisher and Paykel Healthcare, up a further 54c or 2.28 per cent to $24.18 – its highest level in nine months.
Other leading stocks Ebos Group added 40c to $45.98; Fletcher Building gained 10c or 1.99 per cent to $5.12; a2 Milk was up 5c to $7.68; and Napier Port increased 5c to $2.90.
Contact Energy was up 12c to $7.90, and Vector gained 4c to $4.40.
Meridian, unchanged at $5.23, said in its latest operating report that a warm December saw national electricity demand dip 0.4 per cent compared with the same month in 2021 but retail sales increased 1.4 per cent. National hydro storage decreased from 138 per cent to 116 per cent of historical averages in the month to January 10.
Ampol rose $1.49 or 5.03 per cent to $31.09; Gentrack, which provided a strong earnings upgrade pre-Christmas, surged 13c or 5.2 per cent to $2.63; Smartpay Holdings was up 3.5c or 2.9 per cent to $1.24; Eroad gained 5c or 5.38 per cent to 98c; Seeka added 7c or 2.22 per cent to $3.23; and Winton Land increased 4c or 2.41 per cent to $1.70.
Channel Infrastructure, up 1c to $1.44, told the market that terminal and pipeline throughput in the fourth quarter of last year was 800 million litres of fuel, the highest level since the arrival of Covid-19. Jet fuel consumption has now doubled and reaching 65 per cent of pre-Covid levels.
Transport and logistics stocks Mainfreight declined $1.34 or 1.94 per cent to $67.61 after turning around from an intraday high of $69.91; Freightways was down 11c to $9.68; Move Logistics fell 5c or 4.67 per cent to $1.02; and TradeWindow decreased 2c or 3.85 per cent to 50c.
Pacific Edge was down 2c or 3.7 per cent to 52c; Allied Farmers declined 2c or 2.63 per cent to 74c; Serko decreased 4c or 1.79 per cent to $2.20; Just Life Group decreased 1.5c or 3.8 per cent to 38c; and Booster Innovation Fund gave up 6.4c or 4.43 per cent to $1.381.
In the property sector, Vital Healthcare Trust was up 5c or 2.17 per cent to $2.35, and Precinct Properties was down 2.5c or 1.96 per cent to $1.25.
