Market commentary

WELLINGTON: The prospect of rising interest rates and a reduction in economic stimulus cast a shadow over the New Zealand sharemarket which fell nearly half a percent.

The S&P/NZX 50 Index shed 52.75 points or 0.4% to 13,044.50 after reaching an intraday high of 13,181.64. Trading was moderate, 37.7 million shares worth $153.64 million changing hands. There were 84 gainers and 66 decliners over the whole market.

All eyes will be on the release of the latest unemployment figures. Greg Smith, head of research for Fat Prophets, said the unemployment rate for the fourth quarter ending December was predicted to be better than expected.

The market consensus is for the rate to rise from 5.3% to 5.6%, not the doubledigit number forecast last year when Covid19 struck. ‘‘If the numbers look good, then that could signal the peak of the easing cycle by the Reserve Bank and the easing party may even be over. Zero interest rates would be off the table and the rates can only go up from there,’’ Mr Smith said.

‘‘The market is waiting with bated breath to see the unemployment figures.’’’’

Three of the market darlings of the past year drove the index down. Fisher and Paykel Healthcare fell 37c to $33.14 on trade worth $33.14 million, a2 Milk fell 38c to $11.10 and Mainfreight lost $1.19 to $66.16.

Mercury overtook Meridian as the more expensive stock. Mercury was not the subject of the strong overseas exchange traded funds buying like Meridian and Contact, and it has remained consistent, rising 4.5c to $7.14.

Meridian was down 8c to $7.10, after falling from its peak of $9.40 on January 7. Mercury’s high on January 8 was $7.385.

Contact Energy was down 4c to $8.41, while Trustpower, looking to sell its retail operation, gained 8c to $8.78, and Tilt Renewables increased 3c to $6.33.

Port of Tauranga chief executive Mark Cairns, who retires from his role in June, is joining the Freightways board on April 1. Mr Cairns is also a director of Meridian and Northport, which is 50% owned by Port of Tauranga. Freightways’ share price fell to $10.80. Port of Tauranga was down 16c to $7.39.

Seafood company Sanford has pleaded guilty in court to three charges of bottom trawling in a benthic protected area, involving the San Waitaki fishing vessel, and its share price fell 12c or 2.48% to $4.71.

The renewed interest in the sharemarket, fuelled by low interest rates, is shown by the latest statistics released by the NZX exchange. The total value traded last year increased 41.8% to $53.673 billion, the daily average value traded rose 41.3% to $213 million, and the onmarket value traded climbed 62% to $33.274 billion.

The average onmarket trade size fell 37.4% to $2793, showing the increasing influence of online trading platforms. —