Market commentary
WELLINGTON: New Zealand shares joined a rally across Asia, as upbeat investor sentiment spilled over from Wall Street’s close on Friday on optimism over a latestage trial for a hopeful Covid19 treatment.
The S&P/NZX 50 Index rose 39.93 points, or 0.4%, to 11,434.79. Within the index, 25 stocks fell, 18 rose, and seven were unchanged. Turnover was $149.3 million.
The positive sentiment from Wall Street on Friday night spilled over into Asia yesterday: Hong Kong’s Hang Seng gained 0.9% Shanghai’s Composite Index was up 1.3% and Japan’s Topix climbed 2.2%.
Australia’s S&P/ASX 200 was up 0.7% in late trading. ASB Bank economist Chris TennentBrown said markets were ignoring the rising number of new Covid19 cases and focusing on the emergence of possible treatments, such as Gilead’s remdesivir which was shown to support recovery in a field trial of 300 patients.
‘‘We were always going to have a positive day,’’ Craigs Investment Partners head of private wealth research Mark Lister said.
The Friday rally on Wall Street, in which ‘‘highflying tech stocks’’ hit records, had given the local benchmark a solid start yesterday morning, he said.
Internet infrastructure firm Chorus gained 2.8% at $7.27, recovering from a selloff on Friday when the Commerce Commission said it would review some regulations on the firm.
Port of Tauranga posted the day’s biggest gain, up 4% at $7.73 on a light volume 73,000 shares.
Spark New Zealand rose 2.2% to $4.70 and Vector advanced 1.1% to $3.65. Mr Lister said it was gaining as investors sought reliable dividends as an alternative to the electricity sector.
Contact Energy increased 0.5% to $5.65, after dropping 16.1% last week after Rio Tinto announced it would close its aluminium smelter at Tiwai Point.
Other energy companies were weaker: Mercury NZ declined 0.2% to $4.67, Meridian Energy fell 0.2% to $4.50 and Trustpower slipped 0.4% to $6.87.
Summerset Group Holdings advanced 1.4% to $7.10 and Oceania Healthcare rose 1.1% to 96 cents, perhaps benefitting from the possibility that Metlifecare will be taken off the sharemarket if private equity firm EQT’s takeover offer at $6 per share is accepted.
Mr Lister said investors who wanted to hold exposure to the retirement sector could be seeing Oceania as an attractive alternative. Metlifecare rose 0.7% to $5.88.
The benchmark was propped up by heavyweight stocks. Fisher & Paykel Healthcare gained 0.8% at $35.59 and a2 Milk Company rose 0.8% to $20.70.
Restaurant Brands New Zealand posted yesterday’s biggest decline, falling 6.3% to $11.31 after an unexpected 4.3% jump on Friday.
Tourism Holdings fell 4.2% to $1.82, Auckland International Airport declined 2.2% to $6.10, Air New Zealand dropped 1.9% to $1.31 and Vista Group International fell 1.5% to $1.28.
‘‘Virus flareups have reminded people we are not out of the woods yet. If you are in the tourism game or the movie theatre game, all those stocks are sensitive to lockdowns,’’ Mr Lister said. — BusinessDesk