Market commentary

WELLINGTON: The New Zealand sharemarket followed strong momentum on Wall Street by posting a gain of more than 1%, and was powered by big moves from Mainfreight and a2 Milk.

The S&P/NZX 50 Index rose 143.35 points or 1.12% to 12,912.19, after falling to an intraday low of 12,767.04. There were 72 gainers and 50 decliners over the whole market on strong volume of 59 million share transactions worth $231.17 million.

Greg Smith, head of research for Fat Prophets, said traditionally May was soft for the index but the market had opened the month on a positive tone, following on from the United States.

Overnight the Dow Jones Industrial Average picked up 238 points or 0.7% to close at 34,113.23, just short of its record high.

Mr Smith said more than half of the S&P 500 companies had reported average profit increases of 46% for the first quarter ending March, well and truly beating analysts’ forecasts of 24%. A total of 87% of the companies had beaten market expectations.

‘‘If the New Zealand company results over the next few weeks are half as good as the US earnings, then that might provide impetus to confound the tradition that May is a weak month for the market,’’ he said.

‘‘Today there was a mixture of the usual Covid stocks and some reopening ones making good moves. There was something for everyone on the market,’’ he said.

Mainfreight climbed $1.63 or 2.22% to reach another milestone of $75. It touched a high of $75.34 during the day, and moved all the way from an intraday low of $73.52.

Market leader Fisher and Paykel Healthcare was up 19c to $35.54, after turning around a low of $35; Ebos Group rose 52c or 1.71% to $30.92, and Skellerup Holdings gained 4c to $4.54. They are other stocks that have done well out of the Covid pandemic.

Global marketer a2 Milk had ‘‘a relief rally’’, rising 26c or 3.36% to $7.99. Mr Smith said a2 Milk was still likely to fall out of the MSCI global index and ‘‘we’ve possibly not seen the bottom; a lot of investors are heavy in the stock. The company should see better fortunes once the borders reopen.’’

Auckland International Airport, benefiting from the transtasman travel bubble and soon the Cook Islands bubble, gained 16.5c or 2.18% to $7.75; Spark picked up 7.5c to $4.55; Port of Tauranga increased 7c to $7.50; Summerset Group Holdings rose 25c or 2.04% to $12.50; and fellow retirement village operator Ryman Healthcare picked up 11c to $14.11.

Genesis continued a good run, rising 7c or 2.06% to $3.447, while the leading energy stocks have steadied. Contact was up 13c to $7.78; Meridian increased 9c to $5.50. —