Index gains as investors await latest statistics

The New Zealand sharemarket had a strong close yesterday with a rise of more than half a percentage point — but its direction will be fully tested next week with a flow of data that will give investors a strong indication of where the economy is sitting.

After a lunchtime dip the S&P/NZX50 Index gathered pace and finished at 11,757.77, up 79.83 points or 0.68 per cent. The index increased 1.1 per cent for the week, but is down nearly 10 per cent so far this year.

Trading was again light with 26.87 million shares worth $98.82 million changing hands, and there were 81 gainers and 45 decliners over the whole market.

Shane Solly, portfolio manager for Harbour Asset Management, said “we have a busy week of macro-economic data coming up and investors were sitting on their hands waiting for that. Markets always wait for something.”

New Zealand’s latest net migration figure will be released on Monday, followed by national house sales on Tuesday and gross domestic product data on Thursday.

The August consumers price index will be known in the United States mid-week. Annual inflation in the US is expected to fall to 8.1 per cent, from 8.5 per cent in July, and the markets there have already priced in another interest rate rise of 75 basis points from the Federal Reserve the following week.

Solly said it was short term pain for long term gain, but “every time you see inflation data points falling it’s good for stocks and their recovery”.

ANZ Research downgraded its forecast for second-quarter gross domestic product growth to 0.4 per cent, from the previous 1 per cent and well below the Reserve Bank’s prediction of 1.8 per cent.

There was strength in the leading stocks.

Fisher & Paykel Healthcare continued to recover, gaining 28c to $20.20. Auckland International Airport picked up 9.5c to $7.695; Contact Energy increased 14c to $7.95; Mercury added 10.5c to $6.155; Ebos Group collected 56c to $39.99; and

Freightways gained 24c or 2.31 per cent to $10.65.

Port of Tauranga was up 13c or 1.97 per cent to $6.73; Ryman Healthcare increased

25c or 2.77 per cent to $9.27; Summerset Group also improved 25c or 2.29 per cent to $11.15; and ANZ Bank was up 58c or 2.28 per cent to $26. Other gainers included Vital Healthcare Property Trust, up 3c to $2.76; Serko adding 5c to $3.70; and Sky TV rising

5c or 2.13 per cent to $2.40; Personal lender Harmoney was up 1c to

76c after telling the market it will delist from the NZX because of low trading in its shares

and concentrate on the ASX market.