Market commentary
WELLINGTON: Two familiar names, Fisher and Paykel Healthcare and a2 Milk, pushed the New Zealand sharemarket to a strong close for the week — and rising United States inflation failed to put a dent on trading.
The S&P/NZX 50 Index increased 32.37 points or 0.26% to 12,550.39. There were 75 gainers and 60 decliners over the whole market on volume of 39.63 million share transactions worth $163.64 million.
Inflation in the US jumped to its highest level since August 2008, with the consumer prices index rising at an annual rate of 5% in May, up from 4.2% in April. But the US 10year Treasury bond yield fell from an opening 1.49% to 1.43%, though it did reach 1.53% during the day. The yield has now fallen from a high of 1.74%.
Matt Goodson, managing director of Salt Funds Management, said the inflation figure was surprisingly large — it was expected to be 4.6% — but at present investors believe it is transitory rather than permanent.
"Whether this remains the case, we'll see. If central banks tighten their monetary policy, then this will have significant implications for markets," he said.
Mr Goodson said the technology and interest ratesensitive stocks did well overnight (on Wall Street), but this did not really carry into the New Zealand market.
Instead, Fisher and Paykel Healthcare powered the market, rising 62c or 2.12% to $29.92 on trade worth $27.7m. A recovering a2 Milk gained 16c or 2.68% to $6.13, and Ebos Group was up 37c to $33.11. Synlait Milk was down 15c or 4.27% to $3.36.
Freightways increased 20c to $12.10; Contact Energy was up 14c to $8.39; Spark gained 7c to $4.82; Skellerup Holdings picked up 15c or 3.3% to $4.70; Napier Port rose 9c or 2.63% to $3.51; and Turners Automotive climbed another 9c or 2.07% to $4.43.
It was another up and down day for the retirement village operators. Summerset Group Holdings rose 28c or 2.22% to $12.88, Arvida was up 2c to $1.83, while Ryman Healthcare fell 16c to $13.02, and Oceania Healthcare slipped 1c to $1.46.
Other gainers were Vista Group, up 6c or 2.67% to $2.31; PGG Wrightson gaining 7c or 2.12% to $2.37; Enprise Group increasing 6c or 2.91% to $2.12; Scott Technology climbing 12c or 4.84% to $2.60; and Cavalier picking up 1.5c or 3.7% to 42c.
Auckland International Airport fell 15c or 1.95% to $7.54; Fletcher Building was down 6c to $7.82; Infratil declined 22c or 2.83% to $7.55; Mercury Energy decreased 16c or 2.47% to $6.32; and Sanford lost 8c to $4.90. Newlylisted chemicals company DGL Group was down 6c or 4.38% to $1.31, and Rakon fell 4c or 4.3% to 89c.
Interest ratesensitive property companies Property for Industry fell 4c to $2.85; Argosy was down 2.5c to $1.54; Investore declined 2c to $2.05; and Goodman Property Trust decreased 1.5c to $2.295.
SkyCity Entertainment Group put on 5c to $3.60 after significantly increasing its earnings forecast for the year ending June because of betterthanexpected trading at its casinos. It will pay a final dividend in September. —