Market Announcements
Market Summary
The New Zealand sharemarket rallied strongly on Wednesday after the Reserve Bank’s Official Cash Rate cut. The benchmark index broke through the 13,000 point barrier for the first time since February as results from Fletcher Building and Spark received mixed market reactions. On the main board, the S&P/NZX 50 Index closed up 1.10% or 142.62 points, rising to 13,071, after 55.6 million shares worth $208.85m changed hands. The S&P/NZX 20 index closed at 7669.12 points, up 1.16%, while the S&P/NZX 10 index ended the day at 12,802.63, rising 1.27%. There were 89 gainers on the main board and 41 decliners.
The Reserve Bank of New Zealand (RBNZ) cut the Official Cash Rate (OCR) by 25 basis points to 3.00%, in line with market expectations. The NZ dollar fell after the decision, while in the interest rate markets, the two-year swap rate fell by 15 basis points to 2.97% and 10-year bond yields dropped by nine basis points to 4.41%. Hamilton Hindin Greene investment adviser Jeremy Sullivan said the market was buoyed by the Reserve Bank’s decision. “It’s primarily the path for future cuts to 2.5% by the year’s end; the market is pretty happy with it,” Sullivan said. “Members within the committee [RBNZ Monetary Policy Committee], who see it justified to cut further heavily lean on the next one, giving more credence for 50 more basis points to come off this year.”
The results season continued with full-year results from Spark and Fletcher Building. Spark chairwoman Justine Smyth said the past year was “one of the most challenging periods in Spark’s history“ as its full-year reported net profit fell 17.7% to $260m. The telco’s revenue fell 2.5% to $3.75 billion, and its total capital expenditure also fell 17.2% to $429m. Sullivan echoed those sentiments, calling it a “challenging year” for the business. “It had a lower customer spend, although it did deliver on its guidance maintained ahead of earnings. I would say that a cut in the dividend is expected.” Spark’s share price rallied 3.63% or 9c to $2.57 after 6.6 million shares changed hands, the highest volume of the day, with turnover worth $16.9m.
Fletcher Building released its full-year results, putting a net loss of $419m down to tough market conditions. “Main message is another tough year after several tough years. “A wee shining light was that the convention centre is on track for handover in 2025. Although the lack of colour on the sale of the construction business was a bit disappointing.” Revenue for the business fell 9% to $7b, but a highlight was its net debt of $999m, a big improvement on the $1.77b last June. Fletcher’s share price rose 0.33% or 1c to $3.08 with 1.3m shares changing hands on turnover worth $4.1m.
Other big movers on Wednesday included Fisher & Paykel Healthcare, whose share price lifted 70c to $37.65 on turnover worth $16.2m and Mainfreight’s share price fell 60c or 1.01% to $59.00 on turnover worth $21.6m.
Wall Street’s stocks finished mostly lower on Tuesday (US time), dragged down by tech companies retreating from record highs, while a Home Depot earnings report lifted retailers - shares of the home improvement company rose 3.2% after slightly missing analyst expectations but maintaining its full-year forecast. Target, Walmart and Lowe’s report later in the week, with all eyes on potential impacts on consumers from US President Donald Trump’s tariffs.
Source: Business Desk
Australian Market Report
Ahead of the local open SPI futures were 23 points higher at 8902.
- close [Morningstar with AAP]: The Australian share market has bounced back from an early slide with interest rate-dependent sectors helping it finish in the green.
The S&P/ASX200 ended trading on Wednesday up 21.8 points, or 0.25 per cent, to 8,918.0, as the broader All Ordinaries also rose 3.6 points, or 0.04 per cent, to 9,177.4.
A sell off of big tech stocks in the US overnight had traders expecting a tough day, but Moomoo Australia market strategist Michael McCarthy said the lack of tech stocks in the local market shielded it from more damage.
Positive consumer data released on Tuesday, which showed consumer confidence was at its highest level since February 2022, continued to feed into investor confidence on Wednesday.
"The support we saw in the market today seemed to reflect that, in particular, with good support for those retailers," Mr McCarthy told AAP.
Seven of 11 sectors on the ASX finished in the green, with real estate and financials leading, but materials and healthcare hampered the gains.
The heavyweight financials sector gained 1.4 per cent as the four major banks finished higher at the end of trading, led by NAB with a last-minute CBA flip from red to green.
Real estate stocks were also up 1.8 per cent after positive results led to surges for developer Stockland Group and asset manager HMC Capital, which recovered from losses.
Consumer discretionaries finished the day 1.9 per cent higher as Lottery Corporation benefited from shareholder sentiment after better than expected results.
Much of the buying on Wednesday came in areas impacted by interest rates, which included the banks and housing.
"These are all beneficiaries of a lower interest rate environment," Mr McCarthy said.
The materials sector had the biggest decline, slashing 2.3 per cent after fibre cement manufacturer James Hardie tanked almost 28 per cent on weak sales.
Mr McCarthy said the "savage" reaction could stem from shareholder disappointment with the company's results and also its earlier decision to re-list itself in the US without holding a vote.
Health care continued its downwards trajectory, falling 1.1 per cent, with biotech giant CSL extending losses a day after announcing job cuts and spinning off its vaccine arm.
But stocks bounced off lows and rallied into the close as investors bargain hunted in the sector.
Shares in gas company Santos were down after its results had to be pushed back because a United Arab Emirates takeover bid was delayed, amid overall falls in the energy sector which recorded a 1.2 per cent drop.
The Australian dollar is buying 64.43 US cents, down from 64.91 US cents on Tuesday at 5pm AEST.
ON THE ASX:
The S&P/ASX200 rose 21.8 points on Wednesday, or 0.25 per cent, to 8918.0
The broader All Ordinaries gained 3.6 points, or 0.04 per cent, to 9177.4
The NZX 50 added 35.75 points (0.27%) to 13107.05
Companies Holding Annual General Meeting (ASX 300):
Fisher & Paykel Healthcare Corporation Limited
Companies commencing Ex-Dividend Trading Today (ASX 300):
AMP Limited
Brickworks Limited
GWA Group Limited
Insurance Australia Group Limited
JB Hi-Fi Limited
Washington H. Soul Pattinson and Co. Limited
Overseas Market Report
[Morningstar with Dow Jones]:
U.S. stocks ended mixed. The DJIA was unchanged at 44,938.31, the S&P 500 dropped 0.2% to 6,395.78 and the Nasdaq slipped 0.7% to 21,172.86.
Among S&P 500 companies, the top three gainers were Analog Devices Inc ADI surging 6.26%, McKesson Corp MCK jumped 3.85%, and Paramount Skydance Corp PSKY lifted 3.71%.
The biggest decliners were Intel Corp INTC which dropped 6.99%, Target Corp TGT fell 6.33%, and Dell Technologies Inc DELL lost 4.97%.
Asia
Chinese shares closed higher. The benchmark Shanghai Composite Index added 1% to 3,766.21 and the Shenzhen Composite Index rose 0.8% to 2,362.74.
Hong Kong shares ended higher. The benchmark Hang Seng Index added 0.2% to 25,165.94.
Japanese shares ended lower. The Nikkei Stock Average declined 1.5% to 42,888.55.
India shares ended higher. The BSE SENSEX lifted 0.3% to 81,857.84.
Europe
Stocks in the U.K. finished higher. The FTSE 100 Index rose 1.1% to 9,288.14. In Europe, shares closed lower. The Germany's DAX slipped 0.6% to 24,276.97, and the France's CAC 40 fell 0.1% to 7,973.03
