Bargain hunters push NZ stocks higher
New Zealand shares rose as improving risk appetite in the wake of strong US jobs data and a note of caution from the US Federal Reserve sparked bargain-hunting in stocks like Kathmandu, Synlait Milk and a2 Milk.
The S&P/NZX 50 index rose 62.28 points, or 0.7 per cent, to 8806.04. Within the index, 32 stocks gained, 11 fell and seven were unchanged. Turnover was low at $73.9 million.
Stocks across Asia gained sharply after December jobs growth in the US was stronger than expected and after US Federal Reserve chairman Jerome Powell said the Fed could be “patient” when assessing the need for more rate increases in 2019. Both factors helped ease concerns about a possible slowdown in global growth and the US economy in particular.
“The strong positive lead from the US on Friday night has led to a big sigh of relief in markets today (Monday),” said Forsyth Barr broker Suzanne Kinnaird.
Asian share markets were also cheered after China’s central bank announced an easing in policy, with 100 basis points of cuts to bank reserve requirements freeing up around $116 billion for new lending.
The strongest gainer was digital church collection payment operator
Pushpay, which gained 8.5 per cent to $3.20 on stronger than normal volume after it said it achieved its target of breaking even on a monthly cash flow basis prior to the end of 2018 and is confident it will now have positive cash flows on an ongoing
basis. It also reiterated its full-year guidance.
Kathmandu, which lost ground last week after it said the Christmas shopping period fell short of expectations, recovered on some bargain-hunting. The stock added 3.9 per cent to $2.41. Volumes, however, were around a fifth of the average the past 90 days.
Bargain hunters also turned to a2
Milk, which added 3.6 per cent to $11.14 and Synlait Milk, which added 2.7 per cent to $9.15. Kinnaird said both had “seen a lot of profit taking and weakness for no good reason other than weak markets”.
Heartland Bank also fared better, rising 3 per cent to $1.38. The lender has been under pressure since the Reserve Bank said it will impose tougher capital requirements on licensed banks.
In the other direction, Spark New
Zealand eased 0.4 per cent to $4.135. Electricity generator-retailer Meridian shed 1.4 per cent to $3.45 on some profit-taking after it hit a record $3.50 on Friday. Argosy Property shed 2.1 per cent to $1.165.
Kinnaird said overall she is expecting markets to remain fairly quiet as people trickle back from their summer holidays during the next few weeks.