Market close: Uncertain NZ sharemarket continues to flounder

Comvita was up 5c to $3.75. Photo / NZME

A late surge for the second day running saved face for the uncertain New Zealand sharemarket. Before that, the market again traded in negative territory as a latest survey showed business confidence fell sharply.

The S&P/NZX 50 Index climbed from 12,772.74 to a close of 12,814.46 points in the last 45 minutes of trading including the matching session. The index gained 7.56 points or 0.06 per cent, after reaching an intraday low 12,759.13.

There were 83 gainers and 52 decliners over the whole market on another light trading day with 22.7 million shares worth $96.97 million changing hands.

The December Quarterly Survey of Business Opinion (QSBO) revealed that 34 per cent of respondents expected business conditions to deteriorate, compared with 11 per cent in the previous quarter.

ANZ Research said that with lockdown restrictions lasting into the fourth quarter and cost pressures and capacity constraints constricting companies' profit margins, it's no surprise that confidence is heading in the wrong direction.

With upside risks to inflation and labour market stretch already evident in the first few weeks of this year, companies may not feel the pressure coming off for some time yet, the ANZ economists said.

Dan Stratful, investment adviser with Forsyth Barr, said last year was challenging for the market – and it will be just as challenging this year with the same old fears of inflation, rising interest rates and the Covid omicron variant just around the corner.

"Like last year, it will become a stock picker's market. The income stocks such as energy, property and the likes of Spark will face further headwinds," Stratful said.

"Investors will be looking for pockets of the market that are performing – like Mainfreight and EBOS have done in previous years. They will definitely be cyclical stocks and in theory the banking sector should outperform in an environment with rising interest rates. They are good for banking margins."

EBOS Group gained 40c to $40.40 after announcing its $105m retail offer had closed, with shareholders receiving new shares at $34.50 each.

ikeGPS Group, which monitors pole and overhead asset information, rose 6c or 8.22 per cent to 79c after telling the market that a contract extension with a United States fibre infrastructure customer would now generate about $4m in revenue over the next 12-18 months.

Freightways recovered 23c or 1.81 per cent to $12.95 after falling 2 per cent the day before; Skellerup Holdings gained 11c or 1.8 per cent to $6.23; Marsden Maritime Holdings rose 13c or 2.07 per cent to $6.41; Pacific Edge collected 3c or 2.4 per cent to $1.28; and Vista Group increased 5c or 2.25 per cent to $2.27.

Income stocks Chorus increased 12c or 1.7 per cent to $7.16, and Spark was up 9c or 2 per cent to $4.60.

Retailers Kathmandu Holdings gained 4c or 2.84 per cent to $1.45, and Michael Hill International increased 3c or 2.04 per cent to $1.50.

Delegat Group collected 10c to $14.10; Scales Corporation gained 16c or 2.96 per cent to $5.56; Gentrack rose 6c or 3.16 per cent to $1.96; Comvita was up 5c to $3.75; and New Zealand Oil & Gas jumped 3c or 6.45 per cent to 49.5c.

NZME has completed the purchase of BusinessDesk, which specialises in online business news, and NZME's share price increased 2c to $1.22.

Retirement village operators Ryman Healthcare increased 7c to $11.85 but Summerset Group Holdings was down 8c to $13.15.

Market leader Fisher and Paykel Healthcare was down 29c to $31.40 on trade worth $11.95m; Mainfreight shed $1.15 to $91; Auckland International Airport decreased 10.5c to $7.655; and Fletcher Building was down 8c to $7.14.

Other decliners were Turners Automotive decreasing 15c or 3.3 per cent to $4.40; Vulcan Steel shedding a further 10c to $9.89; TradeWindow falling 7c or 2.66 per cent to $2.56; and Bremworth down 3c or 4.23 per cent to 68c.

A broker has revised NZX's full-year operating earnings (ebitda) forecast at $35.5m, which is at the top end of the company's previous guidance of $32m-$35.5m, following better-than-expected exchange trading and capital raisings last year. NZX's share price was unchanged at $1.82.