Market commentaries
WELLINGTON: New Zealand shares yesterday edged higher as positive earnings counterbalanced a weak lead from Wall Street while investors eyed escalating USChina tensions.
The S&P/NZX 50 Index rose 25.72 points, or 0.2%, to 10,882.41, taking the monthly gain to 3.3%. Within the index, 25 stocks rose, 22 fell, and three remained unchanged.
Turnover was $867.9 million, with volumes boosted by the monthly reweighting of the MSCI Equity Indices.
Fletcher Building, up 2% at $3.51, had 82.7 million shares traded.
Stocks on Wall Street were weaker overnight, after US President Donald Trump said he will hold a news conference to announce his response to China’s extension of control over Hong Kong.
Tensions between the US and China are becoming more animated as election polling in the US was tightening, Shane Solly, a portfolio manager at Harbour Asset Management, said.
‘‘A number of comments made by the president and the Republican Party have fired up a response from the Chinese, so there is some anxiety there,’’ he said.
Asian markets followed Wall Street’s lead. Hong Kong’s Hang Seng was down 0.6% at 5pm in Wellington. Markets on China’s mainland were flat.
New Zealand’s stock market outperformed its peers as moderately positive updates from Vista Group International and Infratil helped support investor sentiment.
‘‘We are seeing our market holding up against a little bit of weakness in global markets with some earnings results coming out better than expected,’’ Mr Solly said.
While companies were still cautious about the outlook, New Zealand appeared to be reopening its economy relatively strongly.
Vista rose 7.1% to $1.50. The cinema software company yesterday told shareholders it is starting to see a few green shoots of the business reviving. When planning a recent $65 million capital raising, the company assumed cinemas globally would remain closed for the rest of 2020, followed by a slow reopening through 2021.
Gentrack rose 0.7% to $1.43. The utilitysoftware company today reported a 7% halfyear revenue decline, due to losing some UK energyutility customers. It told investors earnings would improve in the second half.
Infratil fell 0.6% to $4.79, having spent most of the day stronger. Yesterday it signalled a 30% earnings improvement from its CDC Data Centres investment in the current financial year. It maintained its dividend in the period.
Mr Solly said the MSCI reweighting was pushing some stocks around as investment portfolios were reset to match the changes.
Pushpay Holdings led the market higher, rising 8% to $7.66. The stock shot up earlier this month after reporting increased demand for its online donation software during the United States shutdown. It is now up 81.6% this year.
Oceania Healthcare advanced 6% to 89c, with 20 million shares traded.
Chorus rose 5.6% to $7.60, also the likely beneficiary of an increased weighting. Its share price is up 21.2% this year, as internet infrastructure is seen as a safe harbour during the lockdown.
Meridian Energy fell 3.1% to $4.75, and is down 5.4% this year.
Sky Network Television rose 2.7% to 15c.
The Australian banks gave up some of yesterday’s spike as investors came to the view that banks had coped better than expected with the crisis. Westpac Banking Corp fell 1.6% to $19 and Australia & New Zealand Banking Group declined 1% to $19.60.
Mr Solly said it was ‘‘one of the sharpest rallies in some time’’, as economic data suggested market had underpriced the banks and investors were cashing in on those gains.
Among stocks outside the benchmark index, Rakon rose 10.4% to 26.5c after a group of minority shareholders pushed the directors to sell the company to international investors.
Comvita dropped 10.8% to $3.40 after completing a capital raising at $2.50 per share.
‘‘That may or may not prove to be a sweet deal as the business restructures and becomes simplified,’ ’Mr Solly said.
The Australian share market ended the month with a selloff after China went ahead with a controversial national security law for Hong Kong that set up renewed tension with the United States.
The S&P/ASX200 benchmark index finished on the lows of the day on Friday, closing down 95.4 points, or 1.63%, to 5755.7 points, while the All Ordinaries index fell 85.6 points, or 1.44%, to 5872.2.
Despite the selloff, the ASX finished the week up 4.7% following strong gains on Monday, Tuesday and Thursday, and closed the month of May up 4.2%.
All but three sectors: consumer staples, tech stocks and utilities, closed lower. Financials were the worst hit, down 3.6%, after four days of strong gains.
Westpac was down 6.4% to $17.22 after announcing the retirement of chief executive of its institutional bank, Lyn Cobley.
ANZ lost 4.5% to $17.89, Commonwealth Bank lost 3% to $63.75 and NAB fell 5.2% to $17.89. — BusinessDesk/AAP