'Fear of missing out' pushes NZX higher

WILLIAM MACE
Last updated 18:48 30/01/2013

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The New Zealand sharemarket has continued to climb, putting on another 47 points today to reach 4247.54 to better the five-year high achieved on Monday.

In early trading the NZX jumped from 4200 to 4212.09, before hitting 4250 and dropping a few points for the market close.

Infrastructure company Infratil led the gainers and Oceana Gold Corporation headed the decliners on the bourse.

The NZX50's rise represented a 1.12 per cent jump as 29 stocks rose, nine fell and 12 were unchanged over the day.

At 5pm the kiwi dollar was at US83.71 cents, down slightly from US83.73 cents early this morning.

On the NZX today Infratil surged 4.1 per cent to $2.51, clothing retailer Pumpkin Patch rose 3.8 per cent to $1.37, and Freightways was up 2.7 per cent to $4.58.

Metlifecare grew 2.5 per cent to $3.24, retirement village operator Ryman Healthcare was up 2.4 per cent to $4.69, and Sky Television rose 2.3 per cent to $5.20.

Mainfreight also enjoyed a 2 per cent lift to $11.90, followed by Telecom up 1.9 per cent to $2.40 and Trade Me which was up 1.4 per cent to $4.19.

Of the decliners, Oceana Gold dropped 3.4 per cent to $3.14, Heartland New Zealand fell 2.9 per cent to 67 cents and Nuplex Industries was down 1.2 per cent to $3.30.

Steel & Tube Holdings fell 1.1 per cent to $2.55, Westpac Bank dropped 1.1 per cent to $35.11, and Restaurant Brands was down 0.3 per cent to $2.76.

Stuart Hardie, an adviser at Craigs Investment Partners, said the upturn in the markets reflected investors' "fear of missing out" on good dividends returns expected across the year.

"With the interest rate environment we're in at the moment... it looks like investors are looking to get a better return, and they're looking to get into the equity market."

Hardie said he did not believe the Reserve Bank would attempt to change interest rates with its latest announcement tomorrow morning and investors were positioning themselves for good results during reporting season next month.

He believed that seeing both Freightways and Mainfreight gain over 2 per cent in the day reflected confidence in the wider New Zealand economy.

"When an economy starts kicking on you've got goods travelling around the country and that flow gives you a reasonable idea of how an economy's going," he said.

On the currency markets the New Zealand dollar was at US83.71 cents at 5pm after a stagnant day in which the kiwi tracked alongside the Australian dollar.

HiFX senior dealer Michael Johnson said all eyes would be on the Reserve Bank's OCR announcement tomorrow morning, not for any rate change but for Graeme Wheeler's latest statement.

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"Last time the market interpreted Wheeler being a bit more hawkish and concerned about inflation than Bollard and people were surprised, so they'll have a good look at what he thinks of the state of the economy and the future path of inflation," Johnson said.

"He won't want to push interest rates up of be too bullish because it's going to push up that kiwi dollar too much an hurt the export sector."

Johnson believed the kiwi would trade between US84 cents and US83.40 cents overnight.

On the crosses at 5pm the kiwi dollar traded at 79.94 Australian cents, down from 79.98 this morning, and 76.07 Japanese yen, up from 75.98 this morning.

The kiwi was trading at 53.13 pence, down from 53.15 this morning, and was at 62.05 euro cents, down from 62.09 earlier.

The Trade Weighted Index against major trading partners' currencies was at 75.30, up from 75.20 this morning.

The 90 Day Bank bill rate was at 2.7 per cent.

- BusinessDay.co.nz

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