New Zealand market ‘distracted’ as traders eye big moves in Australia

Fletcher Building chief executive Ross Taylor shared a 42% annual profit jump, but the market was largely distracted by moves in Australia.

Abigail Dougherty / Stuff

Fletcher Building chief executive Ross Taylor shared a 42% annual profit jump, but the market was largely distracted by moves in Australia.

A tame New Zealand stock market edged higher on Wednesday as the Reserve Bank delivered much of what the market expected.

The benchmark S&P/NZX 50 index rose 5.7 points to 11,852.93, after a slight gain of 0.4% on Tuesday.

Nikko Asset Management, head of New Zealand equities, Stuart Williams, said trading was largely silent as professional fund managers eyed major moves in the Australian market.

“Most of the New Zealand fund managers have an Australian mandate, and I’m sure they would have been busy with the CSL reports or digesting what happened yesterday with James Hardie. [reporting a rise in first quarter profit]said Williams.

* NZX50 index slides 0.4%, Fisher & Paykel falls 2.3%
* ANZ now sees the official exchange rate doubling to 2% by May
* NZX50 fearless by Reserve Bank rate hike, 5% drop for Meridian

In New Zealand, the biggest stock of the day was Fletcher Building, which rose 1.28% to $5.55 after seeing its annual profit jump 42%.

Net income rose to $432 million in the year to June 30 from $305 million a year ago, the company said. Revenue increased 5% to $8.5 billion.

Fletcher Building estimates it lost $300 million in revenue and $100 million in operating profit in its first quarter due to the impact of Covid-19 lockdowns which saw nearly every New Zealand business shuttered up to five weeks. Still, he benefited from a building boom coming out of lockdown and expects a backlog of works to continue supporting the market this year.

But despite the high trading volume, the stock price did not rise aggressively as high levels of earnings were widely expected, Williams said.

Air New Zealand fell 0.72% to $0.68, after a fairly volatile day, leading traders to weigh the positive of border reopenings and lower oil prices against the pain of the rise. of OCR, he said.

A2 milk was steady at $5.46. Fisher & Paykel Healthcare fell 0.37% to $21.40, Meridian Energy rose 1.1% to $5.35 and Auckland Airport rose 0.6% to $7.75 .

There was little market reaction to the 50-point hike in its Reserve Bank benchmark rate on Wednesday, Williams said.

The central bank said it remained appropriate to continue to tighten monetary conditions “at pace” to maintain price stability and contribute to as many sustainable jobs as possible.

STUFF / Connor Scott

The Reserve Bank raises its key rate to 3%

Core consumer price inflation remained too high and labor resources remained scarce, the bank said.

But the 50-point rise had been largely priced into the market and investors were looking at the long term, Williams said.

“The rise in OCR was broadly in line with expectations. The main issue in the equity market is the cost of doing business going forward. Conversations about offsetting margin pressure will be crucial moving forward” , did he declare.

Traders were eagerly awaiting the rest of the earnings season in earnest later this week, he said.

Wall Street ended a choppy trading day with a generally higher finish, adding to the market’s recent run of gains.

The S&P 500 rose 0.2%, its third consecutive gain, adding 8.06 points to 4305.20. The blue-chip Dow Jones Industrial Average gained 239.57 points, or 0.7%, to 34,152.01, and the tech-heavy Nasdaq fell 25.50 points, or 0.2%, at 13,102.55.

The latest market swings came as traders cautiously eyed generally encouraging financial results from major retailers.

US stocks had their best month in a year and a half in July and the winning streak continued into August.

– With PA

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