Market commentary

WELLINGTON: Utilities investor Infratil hit an alltime high as the New Zealand sharemarket reverted to its defensive stocks as global direction remains unclear.

As it did last week, the resilient S&P/NZX 50 Index finished flat after having two short, sharp rises at lunchtime and in the last halfhour matching session. The index closed down 11.65 points at 11,619.04.

There were 66 gainers and 70 decliners on 22.16 million share transactions, worth $92.1 million.

Infratil, benefiting from its 40% investment in Boston’s Longroad Energy, surged 31.5c to $9.545, 2.1 million shares, worth $19.87 million, traded.

Infratil was sitting at $7.55 on July 1 and has quietly climbed from $4.80 over the past two years.

Recently, renewables business Longroad has recapitalised, including taking on a new shareholder Munich Re with 12%, and the independent valuation of Infratil’s stake has increased from $US220 million ($NZ361 million) to $US800 million.

Hamilton Hindin Greene investment adviser Jeremy Sullivan said everyone had been focused on inflation and interest rates and where they were heading. In New Zealand there had been a flight to safety.

‘‘Infratil is seen as a defensive stock with a great track record. The leading energy companies are also seen as defensive and had a good day.’’

Contact was up 8c to $8.02; Mercury gained 7.5c to $6.085; Meridian increased 2c to $5; and Manawa increased 2c to $5.96. Vector fell 10c to $4.57.

The Reserve Bank of Australia is expected to hike interest rates by 50 basis points this week.

With United States celebrating its Labour Day public holiday, there will be little direction for markets from those shores. The leading US indices have just come through a difficult period.

The Dow Jones Industrial Average fell 3% last week, the S&P 500 declined 3.3% and the technologyladed Nasdaq Composite tumbled 4.2%. It was the third straight week of losses for the indices.

Commodity prices continue to fall, the ANZ World Index down 3.3% last month. Global shipping prices are also falling with the Baltic Dry Index down nearly 50% last month.

ANZ Agri Economist Susan Kilsby said global shipping demand appeared to be easing, which would take some of the pressure off the industry, but it also indicated global demand for goods was falling.

In the latest NZX statistics, total trades in August fell 40.4% to 784.74 million compared with the same month last year and onmarket value was down 34.1% to $1.636 billion. However, the NZX’s funds under administration have increased 27.7% to $10.28 billion.

Fisher & Paykel Healthcare dragged the market down yesterday, falling 44c to $19.35, and a2 Milk declined 8c to $6.37. —