Wall Street’s wild swing boosts local prices

The New Zealand sharemarket caught a whiff of the big turnaround on Wall Street and rose by nearly half a percentage point, with an energetic Fisher & Paykel Healthcare leading the way.

After the Dow Jones Industrial Average changed gear overnight from a drop of 500 points to a gain of more than 800 points in the same session, the S&P/NZX 50 Index opened strongly and hit an intraday high of 10,953.88. The index lost a little momentum, but still closed ahead by 50.61 points or 0.47 per cent to 10,868.09.

There were 78 gainers and 57 decliners over the whole market but trading was again subdued with 21.36 million shares worth $80.67 million changing hands.

The Dow Jones swing was the biggest in its long history, after the US September consumer price index (CPI) showed hotter-than expected inflation data.

Core inflation excluding the volatile energy and food prices reached 6.6 per cent, the highest since August 1982, and overall inflation was 8.2 per cent, down from 8.3 per cent in August and 9.1 per cent in June.

Shane Solly, portfolio manager with Harbour Asset Management, said “some components of the CPI are falling behind and investors are seeing some evidence that inflation may be near the peak.

“The million-dollar question for the capital markets is how close is it for central banks to ease their monetary tightening? I think there’s still two or three interest rate hikes to go.”

He said investor sentiment also improved with the unwinding of risky hedging positions involving Credit Suisse, and the Bank of England ending its liquidity support.

On Wall Street, the Dow Jones index rose 827.87 points or 2.83 per cent to 30,038.72 points; the S&P 500 increased 2.6 per cent to

3669.91, breaking a six-day losing streak; and the Nasdaq Composite gained 2.23 per cent to 10,649.15.

Across the Tasman, the S&P/ASX 200 Index was up 1.77 per cent to 6760 points at

5.45pm NZ time.

At home, Fisher & Paykel Healthcare rallied from its low, rising 60c or 3.31 per cent to $18.70 on trade worth $4.8m; Mainfreight was up 48c to $66.48; Ryman Healthcare gained 6c to $8.54; and Mercury Energy increased 5c to $5.25.

Auckland International Airport gained 6.5c to $7.20 after telling the market that total passengers of 1.122m in August were 67 per cent of the pre-Covid equivalent in the 2019 year ending June. Genesis Energy increased 6c or 2.29 per cent to $2.68 after upgrading its 2023 full-year operating earnings outlook.