Market commentaries
WELLINGTON: Arvida Group led the New Zealand sharemarket higher yesterday, as investors were cheered by positive earnings reports.
And like much of Asia, it shrugged off news Moody’s Investors Service cut its sovereign credit rating on China.
The S&P/NZX 50 Index rose 37 points, or 0.5%, to 7421.78. Within the index, 26 stocks rose, six were unchanged and 18 fell. Turnover was $135 million.
Bryon Burke, head of equities at Craigs Investment Partners, said the New Zealand market was in positive territory and was largely ‘‘order flow driven’’, in that investors were interested in specific stocks in the wake of the results.
Arvida Group, the retirement village company that listed in 2014, added 3.8% to $1.36, after it posted a net profit of $53.7 million in the 12 months ended March 31, up from $24 million a year earlier.
Restaurant Brands added 1.8% to $5.72. Unite Union said it was making headway in its talks with the fast food operator following industrial action. Contact Energy added 2.2% to $5.16.
First NZ Capital this week said low inflows of water into the South Island’s hydroelectricity storage lakes are expected to knock its earnings in the second half of the current financial year.
Tower narrowed its firsthalf loss as its underlying earnings improved. The stock added 4.9% to $1.18.
Fonterra shed 0.5% to $6.10. It lifted its forecast farmgate payout for this season, and raised its expectations for next season, as the world’s largest exporter of dairy products benefits from rising prices.
Air New Zealand added 0.4% to $2.87 after news its passenger numbers rose in April.
In the other direction, Fletcher Building remained out of favour, shedding 2.4% to $7.91, marking the biggest decline on the benchmark index.
Mr Burke said investors would be keeping one eye on New Zealand’s Budget today for any possible news.
The Australian dollar was weaker as the first ratings downgrade on China by Moody’s since 1989 renewed concerns about the economic strength of Australia’s key trading partner.
The Australian dollar hit a low of US74.43c after Moody’s downgraded China’s longterm credit rating to A1 from Aa3, reflecting its view that China’s financial strength will weaken in the coming years as economywide debt rises and potential growth slows.
Most traders said the downgrade was long overdue, and the local currency recovered some ground to be at US74.59c at 5pm AEST, down from US74.94c on Tuesday.
‘‘We think it will have limited impact on the Australian dollar further out because the report provides nothing significant that investors didn’t know already,’’ ThinkMarkets senior market analyst Matt Simpson said.
On the sharemarket, the benchmark S&P ASX200 index gained 0.15%. Miners and major banks were lower, but most other sectors were stronger.
Mining giant Rio Tinto dropped 1.3%, BHP Billiton shed 0.6%, Fortescue Metals was down 4.8% and gold miner Newcrest tumbled 3.6%.
Commonwealth Bank gained 0.1%, while Westpac dropped 0.7%, National Australia Bank shed 0.5% and ANZ was 0.1% weaker.
At the close, the benchmark S&P/ASX200 was up 8.8 points, at 5769 points. The broader All Ordinaries index was up 8.7 points, or 0.15%, at 5811.5 points.
National turnover was 2.1 billion securities traded, worth $6.2 billion. — BusinessDesk/AAP