NZ stocks stage turnaround as inflation falls - Market close

Tower CEO Blair Turnbull. The insurer rose 6c or 7.79 per cent to 83c after upgrading its full-year net profit guidance to greater than $35m, from the previous $22m-$27m. Photo / Brett Phibbs

The New Zealand sharemarket staged a strong turnaround, gaining more than half a per cent, as inflation continues to fall – though in some areas it remains sticky.

The S&P/NZX 50 Index powered ahead in the afternoon and closed at 11,875.35, up 70.51 points or 0.60 per cent after reaching an intraday low of 11,762.28. The index fell nearly 1 per cent the day before.

There were 55 gainers and 87 decliners over the whole market on volumes of 22.72 million share transactions worth $102.24 million.

The March quarter consumer price index increased 0.6 per cent and annual inflation hit 4 per cent, down from 4.7 per cent at the end of last year.

Tradables (imported) inflation was 1.6 per cent, down from 3 per cent, and non-tradables (domestic) inflation was 5.8 per cent, down from 5.9 per cent, and driven by rents (at their highest level in 25 years), construction of new houses, and cigarettes and tobacco.

Stats NZ’s consumer prices senior manager Nicola Growden said price increases in the March quarter were the smallest since June 2021. However, they remained above the Reserve Bank’s target range of 1-3 per cent.

ANZ Research said domestic inflation pressures remained acute, particularly concentrated in services sectors. “These are the sticky components which are likely to show persistence moving forward and continue to imply a more gradual easing of inflation than the Reserve Bank has anticipated.”

Greg Smith, head of retail with Devon Funds Management, said the lower inflation provided some relief for investors and “our defensive market is a buttress to the volatility of late.”

He said the US Federal Reserve chair Jerome Powell was looking for more progress on inflation “amid sticky prices” before cutting interest rates and the same may be true for the Reserve Bank.

“One of the question marks is the recent rise in the oil price and shipping costs and this could be problematic for inflation in the second quarter. We won’t know this until July,” Smith said.

Fisher and Paykel Healthcare was up 38c to $26.78; Mainfreight rose $1.50 or 2.21 per cent to $69.50; Contact Energy increased 17c or 2.02 per cent to $8.59; Chorus rebounded 20c or 2.74 per cent to $7.505; and Freightways collected 22c or 2.57 per cent to $8.78.

Skellerup added 6c to $4.26; a2 Milk increased 17c or 2.8 per cent to $6.24; Scales Corp gained 6c or 1.91 per cent to $3.20; Hallenstein Glasson was up 9c to $5.70; and Chatham Rock Phosphate was up 0.008c or 4.94 per cent to 17c.

Infratil increased 18c to a new high of $10.99 and its market capitalisation of $9.15 billion makes it the third largest weighting stock on the NZX 50 index behind Fisher and Paykel and Auckland International Airport.

Insurer Tower rose 6c or 7.79 per cent to 83c after upgrading its full-year net profit guidance to greater than $35m, from the previous $22m-$27m. The stock has risen more than 16 per cent during the past week.

SkyCity Entertainment, down 1c to $1.87, has appointed Jason Walbridge as the new chief executive. A strategic advisor to global gaming and technology company Aristocrat Leisure in Las Vegas, Walbridge starts his new job in early July.

Ebos Group decreased 38c to $34.63; Meridian Energy eased 7c to $5.76; Restaurant Brands fell 13c or 3.82 per cent to $3.27; The Warehouse was down 4c or 2.72 per cent to $1.43; NZME declined 5c or 5.56 per cent to 85c; and Arvida Group shed 2c or 1.83 per cent to $1.07.

Move Logistics fell 4c or 8 per cent to 46c; Turners Automotive was down 9c or 1.97 per cent to $4.49; Investore declined 2c or 1.79 per cent to $1.10; and Just Life fell 2.5c or 10.2 per cent to 22c.

TradeWindow, up 0.002c to 18.9c, told the market its $2.2m capital raise has gone unconditional after receiving commitments worth more than $1m, including $300,000 to $500,000 from founder and chief executive AJ Smith.

TradeWindow said Smith’s contribution would be as much as 22.7 per cent of the capital sought, above his pro-rata allocation at 17.5c a share, and shareholder approval would be needed.

NZ Windfarms, up 0.002c to 14.1c, told the market that David Prentice, previously with Manawa and Trustpower, has started as its new chief executive.

Blis Technologies, down 0.002c or 10.53 per cent to 1.7c, earlier upgraded its full-year revenue guidance to $11.5m and operating earnings (ebitda) to $800,000 compared with the previous $11m and $300,000.