Late trading surge carries local shares higher

A late, index-related buying surge put the New Zealand share market in positive territory at the close after spending most of the day in the red.

The benchmark S&P/NZX50 index ended 53.88 points or 0.48 per cent higher at 11,372.62.

Harbour Asset Management portfolio manager Shane Solly said the late push higher may reflect some optimism “that we have seen a low point for economic activity and company earnings”.

For the most part, the market had spent the day battling with higher interest rates here and around the world. “The New Zealand sharemarket has been pretty weak as have many other capital markets,” Solly said. “Just where interest rates are now makes it a bit tougher for our market,” he said.

“There have been some pretty big moves in US bond yields, which have echoed through through the rest of the globe,” he said.

US 10-year bond yields traded at 5.13 per cent from below 5 per cent at the start of the month.

“That generally has put capital markets on the back foot,” Solly said.

NZ 10 year-bond yields are now at

5.19 per cent, their highest point since

2011, which Solly said placed a higher hurdle on the local market’s ability to deliver competitive returns.

The market overall appeared to be suffering from concerns about higher interest rates after the week’s stronger-than-expected 0.9 per cent gain in GDP for the June quarter.

Fletcher Building lost four cents to $4.62 on the back of economic uncertainty but also perhaps due to “choppiness” before the October 14 election, Solly said.

The late buying surge took Fisher & Paykel Healthcare up from its low point of $21.53 to end at $21.88, down 3c.

The stock, along with its competitor ResMed, has continued to be buffeted by the advent of “GLP-1”, a pharmaceutical product that causes weight loss. FPH’s respiratory products are typically used on overweight patients.

Ryman Healthcare ended 8c up at $4.62 after announcing it had extended its bank facilities and made an amendment to its interest coverage ratio covenant. The company’s bank facility limit has been increased by $119 million to $2.6b.

Shares in Synlait Milk, which reports its annual result on Monday, firmed 2c to $1.27.

The cash-strapped dairy company has already told investors that, after a series of earnings downgrades, they can expect a loss of up to $5m or a profit of up to $5m.

Meanwhile, the closely aligned a2 Milk saw its share price gain 4c to $4.66.