Blue chips drag NZX50 higher as RBA hikes cash rate in close call

New Zealand’s S&P/NZX 50 index staged a late rally as heavyweight stocks including Infratil and Fisher & Paykel Healthcare buoyed the benchmark, with Asian markets bolstered by Nvidia chief Jensen Huang’s projection of selling US$1 trillion of chips over the next two years.

The trans-Tasman markets had tapered off in the run-up to the Reserve Bank of Australia’s policy review, which delivered a quarter-point rate hike in a split decision as policymakers weighed up inflationary pressures already building with the threat posed by rising oil prices.

Tourism companies remained under pressure as the Iran conflict continues to intensify, with travel software developer Serko and rental campervan operator Tourism Holdings at the bottom of the leaderboard.

Meanwhile, domestic partial inflation figures from Statistics New Zealand showed rents and food prices eased in February, although economists are bracing for the impact of the petrol price surge to feed through when the March data arrives.

A late turn

The NZX50 increased 17.65 points, or 0.1%, to 13,182.23, snapping a three-day decline as a late rally dragged it into positive territory for the day. Within the index, 20 stocks gained, 24 declined, and six were unchanged. Turnover across the main board was $130.1 million, of which Infratil accounted for almost $15 million as it rose 0.6% to $10.90.

Fellow heavyweights F&P Healthcare and Auckland Airport accounted for $14 million and $12.7 million as they respectively advanced 0.7% to $38.63 and 1.1% to $8.38.

Nvidia’s developer conference set an upbeat tone across Asia after CEO Huang’s keynote speech allayed some of the concerns about the artificial intelligence, in an admittedly volatile environment where sentiment turns swiftly.

Australia’s S&P/ASX 200 index was up 0.3% in late trading, while Singapore’s Straits Times Index rose 1.1% and Japan’s Nikkei 225 rose 0.4%.

The trans-Tasman pair had been softer heading into the RBA’s policy meeting, which lifted the target cash rate 25 basis points to 4.1%, as expected, albeit in a finely balanced vote of five-to-four.

Generate Investment Management investment specialist Greg Smith said central banks are getting torn in two directions, where rising oil prices push up energy costs and drive wider inflation, while also cooling economic activity.

“Markets are still behaving like this will be a relatively short war,” he said.

The kiwi dollar traded at 82.70 Australian cents at 5pm in Auckland from 82.88 cents yesterday, and rose to 58.43 Australian cents from 58.10 cents.

Clearing one’s throat

Reserve Bank of New Zealand governor Anna Breman is due to deliver a speech on monetary policy next week, which Smith said may see her jawbone the banks after Westpac NZ lifted its one- through five-year mortgage and deposit rates. The yield on 10-year government bonds fell 7 basis points to 4.67%.

The big four banks rallied in Australia, with dual-listed ANZ Group Holdings up 1.4% at $45.48 on the NZX and Westpac Banking Corp increasing 0.8% to $49.80.

Vista Group International posted the sharpest gain on the NZX50, up 2.5% at $1.85, while broadband network operator Chorus rose 2% to $9.29, having shed yesterday shed rights to an upcoming dividend payment.

Goodman Property Trust was the most heavily traded stock on the day with 2.7 million units changing hands as the commercial landlord ended the session unchanged at $1.94, while Spark New Zealand dipped 1.3 %to $2.26 on a volume of 2.5 million after the National Business Review reported the telco dismissing speculation it’s eyeing up a primary listing in Australia.

Tourism companies remained under pressure as Brent crude oil futures were up 2.9% at US$103.10 a barrel at 5pm in Auckland.

Serko was at the bottom of the leaderboard as it fell 5.8% to $1.865, while Tourism Holdings dropped 4.9% to $2.13. Pay-TV operator Sky Network Television declined 4.4% to $3.05 and rubber goods maker Skellerup Holdings slid 2.5% to $5.50.

Retailer KMD Brands extended its decline to a new all-time low, slipping 2.4% to 20 cents.

Outside the benchmark index, My Food Bag surged 15% to 23 cents after the food-kit maker raised its earnings guidance with strong second-half sales and wider margins, despite an increase in the cost of ingredients through the period.

Stats NZ figures today showed food prices and housing rents both fell 0.1% in February, in partial inflation data predating the spike in petrol prices emanating from the Middle East conflict.

Reporting by Paul McBeth. Image from Curious News.