NZ shares rally as Asian markets eye US inflation

New Zealand shares rose for a second day in a fairly subdued day in Asian markets, with investors awaiting US consumer inflation figures and their potential impact on the pace of this year’s rate cuts.

The S&P/NZX 50 index rose 59.19 points, or 0.5%, to 12,886.23 in relatively light turnover of $86.7 million across the main board. New Zealand’s benchmark index was one of the stronger performers across Asia, with Australia’s S&P/ASX 200 index down 0.1% in late trading, Japan’s Nikkei up 0.2% and Singapore’s Straits Times index slipping 0.5%.

Investors took mixed cues from Wall Street where more subdued producer prices didn’t allay fears that the Federal Reserve might only cut its fed funds rate a quarter-point this year, weighing more heavily on the tech-heavy Nasdaq, where tech companies are often buoyed by ever-rising valuations.

That’s been driving up bond yields, with the yield on the New Zealand 10-year government bond climbing 6 basis points to 4.78%, erasing the yield advantage on 10-year US Treasuries. The kiwi traded at 56.06 US cents at 5pm in Auckland, almost unchanged from yesterday.

Slow and steady

The NZX50 was bolstered by a raft of familiar companies that typically pay reliable dividends, with Spark New Zealand the most heavily traded on a volume of almost 3 million shares as it climbed 2.1% to $2.95.

Power companies Mercury NZ rose 1.4% to $6.05 while Contact Energy advanced 1.7% to $9.39, Meridian Energy increased 0.2% to $5.865 and Genesis Energy gained 0.5% to $2.17.

Auckland International Airport climbed 2.7% to $8.68, and commercial landlords Kiwi Property Group rose 2.7% to 94.5 cents and Precinct Properties NZ gained 0.4% to $1.215.

Sky Network Television led the benchmark index higher, rising 3.8% to $2.75 on its biggest trading volume so far this month of 146,000. The NZ Herald newspaper picked up on Forsyth Barr research in December touting the pay-TV operator as a potential takeover candidate this year, while the New York Times reported overnight that Saudia Arabia’s sovereign wealth fund is eyeing up a stake in streaming sport network DAZN, which recently cut a deal to buy Australia’s Foxtel from News Corp and Telstra.

Tourism Holdings gained 3.5% to $2.05 and Fletcher Building increased 2.8% to $2.93.

Outside the benchmark index, PaySauce rose 4.8% to 22 cents after reporting an 11% increase in customer numbers in the December quarter and boosting its annualised recurring revenue to $9.1 million, also up 11% from a year earlier.

General insurer Tower posted the day’s biggest decline, falling 4.6%, or 6 cents, to $1.26, after shedding rights to its 6.5 cents per share dividend.

Vista Group International dropped 4.5% to $2.97, with tech companies broadly following the Nasdaq's lead overnight. Eroad fell 1.8% to $1.07, ikeGPS was down 1.8% at 54 cents and Gentrack declined 1.1% to $11.59.

Fisher & Paykel Healthcare fell 1.5% to $37.72, taking little comfort from Eli Lilly’s slower sales of its weight-loss and diabetes drugs in the December quarter.

Reporting by Paul McBeth. Image from Curious News.