Rebound almost erases previous day’s losses

The New Zealand sharemarket clawed back lost ground yesterday thanks to end-of-quarter buying, to finish with a strong gain.

The S&P/NZX50 index ended 118.40 points, or 1.06 per cent, higher at 11,296.43, almost erasing Thursday’s late 1.25 per cent decline.

Total trades were worth $190.6 million. There were 185 rises and 41 falls.

The gain came at the end of a hard month for sharemarkets here and around the world after key US 10-year bonds hit 4.59 per cent from just 4.11 per cent at the start of the month.

“When the discount rate goes up like that, then all other financial assets, including equities, should fall,” said Salt Funds managing director Matt Goodson.

“The market was sold down very hard at the close yesterday [Thursday], which was unusual,” he said. “Today was the end of the quarter and the market has ended with a reasonable gain.”

Clothing retailer Hallenstein Glasson ended 35c or 6.1 per cent

higher at $6.09 after reporting a nearly 25 per cent increase in net profit to $31.98m for the 12 months to August 1. Group sales were $409.7m — up 16.7 per cent.

Contact Energy was unchanged at $8.04 after announcing that it now intends to bring its Tauhara geothermal project on line in the first quarter of the 2024 year from the previously advised fourth quarter of this year.

The delay reflected a longer than expected commissioning period, with remediation required on a number of steam field valves to ensure the performance of safety systems, it said. Goodson said the implications of the delay were minor.

“One of the interesting things that we are seeing from the retailers is the sharp fall in transport costs,” he said.

On that score, transport firm Mainfreight had been weak but ended with a strong surge, closing $2.38 or 3.8 per cent higher at $65.18.

Mainfreight had been a beneficiary of high transport costs over the past three or four Covid-affected years, but analysts who cover the stock now have that benefit coming out.

“It’s been under pressure on concerns that earnings might come under pressure as freight rates peel off and as economies do it hard, but today we have seen a noticeable bounce,” Goodson said.

Used car dealership 2 Cheap Cars put on another 9c, or 11.8 per cent, to close at 85c, having gained 14c on Thursday. The company this week issued upbeat earnings guidance for the year of $5.2m-$5.7m.

Cash-strapped Synlait Milk continued to regain ground, finishing at $1.43, up by 5c.