Market commentary

WELLINGTON: The United States Federal Reserve’s economical interest rate rise triggered a new surge on Wall Street and a solid gain for the New Zealand sharemarket.

There was relief, that sprang around global markets, when the Fed overnight raised its cash rate 50 basis points to a range of 0.75%1%, instead of increasing by 75 basis points. It was still the biggest increase since 2000.

The S&P/NZX 50 Index opened strongly but tapered off, finishing with an increase of 72.36 points or 0.62% to 11,747.57 after reaching a morning high of 11,771.77.

Strangely, trading was still light with 35.12 million shares worth $105.42 million. There were 89 gainers and 43 decliners on the main board.

Greg Smith, head of retail with Devon Funds Management, said the Federal Reserve provided a benign outcome and this produced positive sentiment, with the chair Jerome Powell saying a 75 basis points hike was not on the table.

‘‘Where the Fed goes, most others follow, and it calmed the farm about aggressive rate hikes going forward. The Fed indicated it can control inflation through modest rate tightening,’’ Mr Smith said.

He said one issue overhanging the local market was the Reserve Bank’s Financial Stability Report which warned of steeper falls in house prices, by as much as 30% and 10% of mortgage holders — mainly those who have bought in the past two or three years — might experience negative equity.

On Wall Street, Dow Jones Industrial Average rose 2.81% to 34,061.06; S&P 500 increased 2.99% to 4300.17; and Nasdaq Composite surged 3.19% to 12,964.85. Up to April this year, S&P 500 fell more than 13% — the worst fourmonth start to a year since 1939.

Across the Tasman, the S&P/ ASX 200 Index was up 0.85% to 7366.7 points at 6pm NZ time.

At home, Fisher and Paykel Healthcare gained 25c to $21.50; Ebos Group increased 50c to $42.38; Freightways picked up 12c to $12.01; Restaurant Brands rose 41c or 3.3% to $12.84; and Synlait Milk collected 7c or 2.08% to $3.44.

Pushpay Holdings rose 3c or 2.26% to $1.36 as investors await details of the approaches and interest in buying the firm.

Briscoe Group rose 15c or 2.59% to $5.95 after telling the market that first quarter sales increased 1.77% to $176.2 million compared with the previous corresponding period. Homeware was up 2.3% to $106.8 million, and sporting goods sales increased 1.21% to $69.4 million. Briscoe is confident of protecting a large portion of its 633 basis points margin gain.

The Warehouse Group gained 16c or 4.94% to $3.40 —