Market commentary
WELLINGTON: Heavyweight Fisher & Paykel Healthcare hit a twoyear low, but the New Zealand sharemarket was again steadyasyougo while nervous investors overseas braced for more interest rate rises on high inflation yesterday.
The S&P/NZX 50 Index was down 19.81 points to 11,599.23 after trading in a range of 11,619.04 and 11,574.51.
There were 67 gainers and 65 decliners over the whole market on light volume of 24.5 million share transactions, worth $95.62 million. Local investors are no doubt keeping an eye on international events. Russia halted gas supplies to Europe via the Nord Stream 1 pipeline and European Union governments are pushing through multibillioneuro packages to prevent utilities buckling under a liquidity squeeze and protecting households from soaring energy bills.
Opec agreed to a small oil production cut by 100,000 barrels a day — only 0.1% of global demand for October — to boost prices.
The Reserve Bank of Australia increased its cash rate, as expected. As inflation nears 10% on the other side of the world, the European Central Bank is expected to make a 75basispoints hike on Friday, and the US Federal Reserve chairman is making a further speech this week.
Craigs Investment Partners head of private wealth research Mark Lister said the New Zealand market had been ‘‘a standout given the weakness in Europe and United States — and it’s come on the back of the strong reporting season’’.
The latest Australian interest rate rise should not have much effect on the local market, he said.
‘‘There may be a bit of movement in the currency but we are well ahead of them in terms of monetary policy tightening.’’
ANZ Research believes inflation in New Zealand has peaked at 7.3% mainly because of the fall in oil prices, but that the Reserve Bank will need to lift the official cash rate (at present 3%) to 4% by the end of the year and keep it there for several years to bring inflation back to 2%.
Globally, extremely tight labour markets, climate change, geopolitical tensions, energy shortages and trade disruption all had the potential to generate a ‘‘sustained period of high global inflation’’, it said.
At home, Fisher and Paykel Healthcare fell 45c to $18.90 — going under its June 16 low of $19.45. It recently downgraded its operating revenue for the first half of the 2023 financial year to about $670 million compared with $900 million in the previous corresponding period.
Contact Energy was up 7c to $8.09; Genesis increased 2.5c to $2.96; Ryman Healthcare gained 12c to $9; Summerset Group added 8c to $10.98; and apple exporter Scales Corporation rose 22c to $4.769. —