US Federal Reserve decision and positive local GDP figures buoy investors - Market close

Federal Reserve chairman Jerome Powell keeps interest rates unchanged and indicates two further cuts are likely later this year. Photo / AFP

The New Zealand sharemarket greeted the higher-than-expected growth in the gross domestic product (GDP) with a rollercoaster ride – its rebound stymied by a large trade in Channel Infrastructure.

The S&P/NZX 50 Index climbed to an intraday high of 12,133.54 after news that the December quarter GDP rose 0.7%, ahead of forecasts of between 0.3-0.5%, meaning the country has come out of the recession.

The index steadied when the sale of 52.95 million Channel shares worth $97.46m was notified and closed at 12,054.72, up 8.79 points or 0.073%. There was a total of 94.87m share transactions worth $256.53m.

Matt Goodson, managing director of Salt Funds Management, said there were strong leads from the United States and Australia, but the local market was weighed down by the Channel placement at $1.84 a share.

“It was the last of the oil company holdings in the old NZ Refinery Co (which became Channel) and the placement needed fundraising of $100m,” Goodson said.

“The shares were held by Z Energy which is now owned by Ampol.”

Channel Infrastructure, now a fuel import terminal, was down 5c or 2.6% to $1.87.

The US markets rebounded after the Federal Reserve left interest rates unchanged and indicated there would be two further rate cuts later this year.

The Dow Jones Industrial Average was up 0.92% to 41,964.63 points; S&P 500 increased 1.08% to 5675.29; and Nasdaq Composite rose 1.41% to 17,750.79.

The Fed said escalating trade frictions are a prospective headwind to the US economy and downgraded the outlook for economic growth to 1.7%, from the previous 2.1%. Inflation is likely to increase to 2.8%, up from 2.5%.

Across the Tasman, the S&P/ASX 200 Index had risen 1.15% to 7918.2 points at 6pm NZ time.

Back home, GDP per capita rose 0.4% during the December quarter, its first rise in two years. ANZ Research said economic growth is coming off a very weak base after a 2.2% fall over the previous two quarters.

“All up, we don’t see any major implications for the Reserve Bank in the [GDP] data. We expect the bank will deliver three 25 basis points cuts over the next three meetings to take the official cash rate to 3.0% by July,” ANZ said.

Fonterra Co-operative Group was up 6c to $4.95 after reporting a 14% increase in revenue of $15.59 billion net profit of $729m, up 8%, for the six months ending January. It is paying an interim dividend of 22c a share on April 8.

Fonterra said the co-op is in a great shape, with milk collections, the forecast farmgate milk price (of $10 per kg/MS) and earnings performance all up on this time last year.

Earnings per share was 44c, up 10% and Fonterra has increased its full-year guidance to 55-75c. Forecast milk collections for the year are up 2.7% to 1510m kgMS.

During the first half, the ingredients sales volume was down 3.9% but operating profit was up $229m to $696m because of better margins and improved product mix. Foodservice volumes increased 8.3% and operating profit was $230m compared with the record high of $342m in the 2024 financial year when input costs were much lower.

Fonterra Shareholders’ Fund gained 7c to $5.72; Synlait Milk increased 3c or 3.09% to $1; Chorus added 16.5c or 2.15% to $7.825; NZME collected 2c or 1.77% to $1.15; and NZ King Salmon Investments was up 1c or 4.44% to 23.5c.

The energy sector had a solid day. Mercury rebounded 21c or 3.82% to $5.71; Meridian was up 8c to $5.40; Manawa collected 7c to $4.65; and Vector increased 10c or 2.57% to $3.99.

The dual-listed banking groups ANZ and Westpac increased 80c or 2.56% to $32.03 and 72c or 2.2% to $33.47 respectively.

Skellerup Holdings was up 6c to $4.78; Sanford increased 15c or 3.3% to $4.70; Tourism Holdings improved 6.5c or 3.93% to $1.72 as tourism spending increases; and AFT Pharmaceuticals gained 5c or 2.02% to $2.53.

Infratil decreased 23c or 2.19% to $10.27; Summerset shed 15c to $11.32; The Warehouse was down 3c or 3.53% to 82; Vulcan Steel declined 24c or 2.85% to $8.19; Bremworth shed 2c or 3.17% to 61c; and Green Cross Health eased 3c or 3.75% to 77c.

Santana Minerals, up 2.5c or 4.03% to 64.5c, has lodged its mining permit application with NZ Petroleum & Minerals to target gold production at the Central Otago Bendigo-Ophir mine by the end of next year.

New Talisman Gold Mines increased 0.007c or 14.89% to 5.4c after telling the market it expects to begin production in the Karangahake Gorge later next month.

New Talisman said it could meet its self-imposed deadline for the end of month for plant assembly and commissioning, but it is better to defer processing by a few weeks.