Profit- taking results in pause after long rally

The New Zealand sharemarket took a pause from its sixweek rally, weighed down by some profit- taking. But the market was still heartened by the continuing fall in wholesale interest rates.

The S& P/ NZX 50 Index closed at 11,550.2, down just 2.68 points or 0.02 per cent after a late surge in the last hour. The index gained nearly 0.5 per cent for the week and is now up 0.7 per cent for the year to date.

There were 97 gainers and 42 decliners over the whole market with 112.61 million shares worth $ 320.21m changing hands. The trading session was extended for the final day of the quarterly rebalancing for the NZX and FTSE Russell indices.

Turners Automotive, down 10c or 2.09 per cent to $ 4.68 on trade worth $ 15.28m, and Gentrack, rising 37c or 5.75 per cent to $ 6.81 on trade of $ 26.42m, are joining the NZX top 50. Synlait Milk, unchanged at 95c, and Pacific Edge, declining 0.005c or 6.25 per cent to 7.5c, are being removed.

Shane Solly, portfolio manager with Harbour Asset Management, said the market rally has been in full swing and it was time to turn the noise down.

“There’s been a bit of profit- taking going on, and it’s been a strong week, boosted by the lower interest rates globally.

“With interest rates stabilising and the cost of capital becoming less of an issue, the mix is there for merger and acquisition activity amongst undervalued stocks. We’ve seen it in the Australian market and New Zealand could rejoin that party,” Solly said.

The NZ 10- year Government bond yield has settled at 4.56 per cent, a full percentage point drop from 5.57 per cent on October 19. The US 10- year Treasury note yield went below 4 per cent for the first time since August, trading at 3.948 per cent.

In the US, the Dow Jones Industrial Average Index climbed higher, increasing 0.43 per cent to 37,248.35 points, and the S& P 500 was just 1.6 per cent off its all- time high with a 0.26 per cent gain to 4719.55.

At home, the retirement village and property sectors benefited from the fall in interest rates.

Summerset Group rose 42c or 4.34 per cent to $ 10.10; and Ryman Healthcare was up 4c to $ 5.35.

Among the property stocks, Argosy increased 3c or 2.86 per cent to $ 1.08; Vital Healthcare Trust rose 9c or 4.29 per cent to $ 2.19; Stride added 5c or 3.68 per cent to $ 1.41;

Property for Industry collected 4.5c or 2.04 per cent to $ 2.25; Precinct was up 3c or 2.56 per cent to $ 1.20; and Kiwi Propoerty picked up 4c or 4.88 per cent to 86c.

Ebos Group fell $ 1.18 or 3.28 per cent to $ 34.82; Fisher & Paykel Healthcare was down 76c or 3.07 per cent to $ 23.99; and Mainfreight shed $ 1.11 to $ 67.11.

Meridian was up 10c or 1.88 per cent to $ 5.41; Manawa was up 21c or 5.06 per cent to $ 4.36; and Genesis gained 7c or 2.85 per cent to $ 2.53.