Market close: NZ sharemarket rides strong Wall St momentum

The New Zealand sharemarket followed strong momentum on Wall Street by posting a gain of more than one per cent, and was powered by big moves from Mainfreight and a2 Milk.

The S&P/NZX 50 Index rose 143.34 points or 1.12 per cent to 12,912.19, after falling to an intraday low of 12,767.04. There were 72 gainers and 50 decliners over the whole market on strong volume of 59 million share transactions worth $231.17 million.

Greg Smith, head of research for Fat Prophets, said traditionally May is soft for the index but the market has opened the month on a positive tone, following on from the United States.

Overnight the Dow Jones Industrial Average picked up 238 points or 0.7 per cent to close at 34,113.23, just short of its all-time high.

Smith said more than half of the S&P 500 companies have reported average profit increases of 46 per cent for the first quarter ending March, well and truly beating analysts’ forecasts of 24 per cent. A total of 87 per cent of the companies have beaten market expectations.

“If the New Zealand company results over the next few weeks are half as good as the US earnings, then that might provide impetus to confound the tradition that May is a weak month for the market,” Smith said.

“Today there was a mixture of the usual Covid stocks and some re-opening ones making good moves – there was something for everyone on the market,” he said.

Mainfreight climbed $1.63 or 2.22 per cent to reach another milestone of $75. It touched a high of $75.34 during the day, and moved all the way from an intraday low of $73.52.

Market leader Fisher and Paykel Healthcare was up 19c to $35.54, after turning around a low of $35; Ebos Group rose 52c or 1.71 per cent to $30.92, and Skellerup Holdings gained 4c to $4.54 – they are other stocks that have done well out of the Covid pandemic.

Global marketer a2 Milk had “a relief rally”, rising 26c or 3.36 per cent to $7.99. Smith said a2 Milk is still likely to fall out of the MSCI global index and “we’ve possibly not seen the bottom; a lot of investors are heavy in the stock. The company should see better fortunes once the borders re-open.”

Auckland International Airport, benefiting from the transtasman travel bubble and soon the Cook Islands bubble, gained 16.5c or 2.18 per cent to $7.75; Spark picked up 7.5c to $4.55; Port of Tauranga increased 7c to $7.50; Summerset Group Holdings rose 25c or 2.04 per cent to $12.50; and fellow retirement village operator Ryman Healthcare picked up 11c to $14.11.

Genesis continued a good run, rising 7c or 2.06 per cent to $3.447, while the leading energy stocks have steadied. Contact was up 13c to $7.78; Meridian increased 9c to $5.50; and Mercury also gained 9c to $7.09. But Trustpower was down 7c to $8.68.

Other gainers were Restaurant Brands, up 20c to $13.40; Colonial Motor Company rising 10c to $9.10; and Kingfish and Marlin Global, investment companies run by Fisher Funds, moving 5c or 2.56 per cent to $2 and 9c or 5.96 per cent to $1.60 respectively. Enprise Group, which invests in high-growth technology companies, climbed 31c or 24.41 per cent to $1.58.

ANZ Banking Group fell 18c to $31.13 ahead of reporting its half-year financial result. Westpac Banking Corporation declined 25c to $28.03 a day after announcing a 189 per cent increase in net profit to $3.44b for the first six months compared with the previous corresponding period.

Online travel provider Serko was down 10c to $6.90; South Port New Zealand fell 24c or 2.73 per cent to $8.55; Hallenstein Glasson shed 6c to $732; The City of London Investment Trust declined 29c or 3.65 per cent to $7.65; and NZME decreased 3c or 3.8 per cent to 76c.

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