Mainfreight shines as rally gains strength
Mainfreight, gaining from a rebound in its sector overseas, had a strong gain of more than 5 per cent as the New Zealand sharemarket stretched its rally to reach a 10-month high.
After trading flat for most of the day, the S&P/NZX50 Index had a sharp rise in the last half-hour matching session and closed at 12,197.15 — up 44.99 points or 0.37 per cent.
There were 77 gainers and 47 decliners over the whole market on volume of 25.53 million share transactions worth $112.5 million.
The index has risen by 6.3 per cent so far this year, erasing the decline in the December quarter and returning to the level of late March last year.
Shane Solly, portfolio manager with Harbour Asset Management, said “we have certainly seen a healthy rally. The technology sector in the United States remains robust and this optimism has flowed through to the New Zealand market.
“But we still have plenty of economic data points to work through to see if inflation has really peaked and whether interest rates will start coming down. The next indicator is the US labour market data released overnight.”
In the US, the technology-driven Nasdaq Composite, battered last year, has surged 16.57 per cent this year, and Facebook and Instagram owner Meta Platforms rose 23 per cent to US$188.77 ($291.84) after beating earnings forecasts. The Nasdaq was up 3.25 per cent to 12,200.82 points, and the S&P
500 increased 1.47 per cent to 4179.76. The Bank of England and European Central Bank both raised their official cash rates by 50 basis points but, like the US Federal Reserve the day before, recognised that inflationary pressures were easing.
The Bank of England, which raised its rate to 4 per cent, forecast a shorter and shallower recession after officials had previously said the UK economy would enter its longest recession on record.
At home, the ANZ-Roy Morgan Consumer Confidence Index in January bounced 9 points off its record low to 83.4, undoing the December fall.
Global transport and logistics company Mainfreight climbed $3.65 or 5.18 per cent to $74.10. It is providing a trading update on Thursday.
Solly said profits in the transport sector are holding up and some of Mainfreight’s peers overseas have been making betterthan-expected earnings announcements.
There was continued buying in Ebos Group, up 64c to $43.39, on speculation that it is set to join the MSCI World Index. Fletcher
also continued its run, gaining 16c or 3 per cent to $5.50.