Market Announcements
Market Summary
The New Zealand sharemarket lifted on Wednesday as the big four gentailers rallied after the Government’s announcement of energy sector reforms.
The S&P/NZX 50 Index closed up 1.07% or 141.63 points, rising to 13,433.99 after 46 million shares worth $181.1 million traded.
The S&P/NZX 20 index closed at 7,721.78 points, up 1.07%, while the S&P/NZX 10 index ended the day at 12,869.12, rising 1.16%.
There were 98 gainers and 48 decliners on the main board. The Government, in response to a long-awaited report from consultancy Frontier Economics, said it would partially open up the big three partially state-owned power generators to fresh capital and would look into importing liquefied natural gas (LNG) to augment flagging gas reserves.
The whole sector would benefit. The key point is it’s positive developments for the sector, and Meridian is already the biggest beneficiary because of potentially the dry year risk being mitigated.
The commentary around funding of new generation development is also seen as a positive for all of those three government-owned entities.
Energy rally
Meridian Energy’s share price rallied after the news, rising 4.67% or 26c to $5.83 after 2.56 million shares traded on turnover worth $14.8m.
The other majority Government-owned providers, Genesis Energy and Mercury Energy, also lifted.
Genesis Energy's share price rose 2.13% or 5c to $2.40, while Mercury Energy’s lifted 1.35% or 9c to $6.77.
Contact Energy, the only provider without ownership by the Government, also benefited from the news, lifting 8c or 0.88% to $9.18.
Elsewhere, the Fonterra Shareholders Fund fell 0.63% or 5c to $7.95 per unit.
'Performing well'
Now that the September quarter had finished, it was the fifth consecutive monthly rise for the NZ market, dating back to May.
The local market is up almost 12% since the end of April.
In September, the market was up 2.8%. Even though there’s still bad news coming out like the GDP report and a lot of doom and gloom, the market is still actually performing well.
Overseas, the United States Government officially shut down due to a stalemate on budget talks, the first shutdown in more than six years, causing US futures to fall.
The Dow finished at a fresh record on Tuesday (US time) as markets largely shrugged off the likelihood of the partial government shutdown.
Major US equity indices veered in and out of negative territory throughout the day before finishing in the black.
The Dow Jones Industrial Average was up 0.2% at 46,397.89. Several federal government operations were expected to freeze, beginning at midnight on Tuesday, if there is no breakthrough.
Talks between congressional leaders and President Donald Trump concluded on Monday without progress.
“The market seems to be ignoring the fact that we’re looking at a potential shutdown,” Art Hogan of B. Riley Wealth Management said.
Analysts say a shutdown will not significantly affect the US economy unless it is prolonged. While some activity would be curtailed, the expectation is that there would be a bounce when the Government reopened.
However, a closure would delay the release of key economic data, including the September jobs report, which is scheduled to be released on Friday.
Source: BusinessDesk
Australian Market Report
Ahead of the local open SPI futures were 44 points higher at 8898.
- close [Morningstar with AAP]: Australia's share market has finished the day roughly flat, despite trade concerns for BHP weighing heavily on the raw materials sector.
The S&P/ASX200 fell 3.1 points, or 0.04 per cent, to 8,845.7, as the broader All Ordinaries gained 0.7 of a point, up 0.01 per cent to close at 9,136.6.
The two indices seesawed in a choppy trading session, as investors weighed reports of a halt to BHP's China-bound iron ore shipments and a US government shutdown.
"The ASX-200 dropped about 39 points to that low of 8809 and there was a great deal of anticipation ahead of the shutdown and with the BHP news," IG Markets analyst Tony Sycamore told AAP.
"But it might have been a bit of a 'buy the rumour, sell the fact' situation in our market because from there we saw a pretty solid bounce, which started right around 2pm when the US government went into shutdown."
Five of 11 local sectors traded lower on Wednesday, as materials and consumer discretionary stocks fell more than 0.7 per cent.
BHP shares tumbled 2.3 per cent during the session to $41.56, wiping more than $5 billion from the world's biggest miner's $216 billion market cap.
Fellow iron ore giants Rio Tinto (+0.5 per cent) and Fortescue (+1.4 per cent) pushed higher over the session.
Gold miners were mixed, despite the precious metal resetting its record to trade above $US3,875 ($A5,865) an ounce.
The financials sector finished slightly higher after spending most of the day in the red, as CBA and ANZ helped counterbalance losses for NAB and Westpac.
Utilities stocks performed well, pushing 0.8 per cent higher as AGL and Meridian Energy soared four per cent.
Other defensive sectors such as health care and communications services also supported the bourse, tracking with gains for their respective segment giants Telstra and CSL.
Droneshield outperformed the top-200 for a fourth straight session, rocketing 23 per cent higher.
Lithium plays were at the other end of the table, with Liontown plummeting more than 10 per cent and Pilbara Minerals losing more than six per cent.
Weakness in energy stocks continued, the sector fading 0.4 per cent as Woodside slipped 0.8 per cent but Santos edged 0.5 per cent higher.
Oil prices remain under pressure on expectations of OPEC+ production hikes in November, while natural gas futures have spiked to their highest level since late July on higher expected winter demand in the northern hemisphere.
Consumer discretionary stocks were also under pressure, fading 0.8 per cent as Bunnings owner Wesfarmers tumbled 1.3 per cent to $90.81.
The Australian dollar is buying 66.11 US cents, up from 66.01 US cents on Tuesday at 5pm.
ON THE ASX:
The S&P/ASX200 fell 3.1 points, or 0.04 per cent, to 8,845.7
The broader All Ordinaries rose 0.07 points, or 0.01 per cent, to 9,136.6
The NZX 50 Lost -21.68 points (-0.16%) to 13412.31
Overseas Market Report
[Morningstar with Dow Jones]:
U.S. stocks ended higher. The DJIA added 0.1% to 46,441.10, the S&P 500 gained 0.3% to 6,711.20 and the Nasdaq lifted 0.4% to 22,755.16.
Among S&P 500 companies, the top three gainers were NVIDIA Corp NVDA surging 0.35%, Nike Inc NKE jumped 6.41%, and Apple Inc AAPL lifted 0.32%.
The biggest decliners were NVIDIA Corp NVDA which dropped 0.35%, Nike Inc NKE fell 6.41%, and Apple Inc AAPL lost 0.32%.
Asia
Chinese shares closed higher. The benchmark Shanghai Composite Index added 0.5% to 3,882.78 and the Shenzhen Composite Index lifted 0.4% to 2,519.42.
Hong Kong shares ended higher. The benchmark Hang Seng Index added 0.9% to 26,855.56.
Japanese shares ended lower. The Nikkei Stock Average declined 0.8% to 44,550.85.
India shares ended higher. The BSE SENSEX climbed 0.9% to 80,983.31.
Europe
Stocks in the U.K. finished higher. The FTSE 100 Index lifted 1% to 9,446.43. In Europe, shares closed higher. The Germany's DAX added 1% to 24,113.62, and the France's CAC 40 lifted 0.9% to 7,966.95
