Market commentary

WELLINGTON: Investors from across the Tasman stayed away on their Australian Day public holiday and a nervous New Zealand sharemarket drifted for most of the day and then had a late fall on light trading.

The S&P/NZX 50 Index closed down 75.64 points or 0.56% at 13,323.46, after reaching a high of 13,430.32.

Local brokers missed the contact from their Australian clients and just 36.04 million shares worth $127.84 million were traded. There were 60 gainers and 83 decliners over the whole market of 184 stocks.

Dan Stratful, investment adviser with Forsyth Barr, said the local market was becoming difficult to find a bargain in — a bit like the housing market.

‘‘Investors don’t mind paying a bit over the top if the stocks are continuing to grow strongly. I may be able to describe the market better after the reporting season next month,’’ he said. ‘‘It’s had a good run and at some point there will be a correction — and then it will be eagerly bought again.

‘‘In the United States there are pockets of the market where valuations are stretched — such as small, fastgrowing technology stocks, but not the large ones like Microsoft and Google. New Zealand doesn’t have the same technology sector but the gentailers have been overstretched, though they have come back lately.

‘‘We’ve come to accept the daily volatility in Meridian and Contact and yet they are meant to be stable stocks and good for the retirees — but I don’t know about that at the moment,’’ he said.

Fisher and Paykel Healthcare led the market’s late turnaround. It was having another rebound day reaching a high of $36.15 but then lost that gain and more, closing at $34.75, down 62c or 1.75% on trade worth $17 million. Mainfreight dropped $1 to $68.80.

Utilities investor Infratil had another strong day, rising 17c or 2.24% to $7.75 on rumours of a second takeover bid being launched from across the Tasman.

Fletcher Building was up 27c or 4.3% to $6.55, and a2 Milk increased 10c to $11.07. Its supplier Synlait Milk rose 5c to $4.71 after increasing its forecast milk price to $7.20/kg of milk solids, from $6.40/kg, for the 202021 season, driven by the strong rise in dairy commodity prices over recent months.

Contact Energy fell 34c or 3.68% to $8.90; Meridian was down 20c or 2.47% to $7.90; and Mercury declined 17c or 2.31% to $7.20. Genesis was up 5c to $3.83, and Tilt Renewables climbed 21c or 3.45% to $6.30.

Vector was down 5c to $4.25 on its halfyear report. For the six months ending December, network connections in Auckland grew 1.8% to 586,480 compared with the previous corresponding period, but electricity volume distributed fell 1.6% because of the reduced activity. Auckland International Airport was down 21c or 2.8% to $7.29; Air New Zealand fell another 2c to $1.63; Serko shed 12c or 2.14% to $5.50; Seeka declined 6c to $4.80; and Sanford decreased 9c or 1.87% to $4.72.

Chorus was unchanged at $8.40 after reporting it has now completed 92% of its ultrafast broadband rollout. For the second quarter of its 2021 financial year, fibre uptake increased 63% and connections grew by 29,000. —