NZX Sharemarket Flat

The New Zealand sharemarket finished flat yesterday after a sharp late fall as investors eagerly awaited a further interest rate cut in the United States. After making steady gains throughout the day, the S&P/NZX 50 Index dipped from 13,516.19 in the last hour of trading and closed at 13,486.32, up 2.3 points or 0.02%. There were 62 gainers and 81 decliners on the main board with 32.2 million shares worth $120.5m changing hands.

ASB chief economist Nick Tuffley said economic growth in NZ was expected to hit an above annual trend pace of 2.5% or more over the next year as better cash flows start to leak out of people’s wallets. “The main thing fuelling the recovery will be the low level of interest rates,” he said. “Even though the Reserve Bank has stopped cutting interest rates now, in our view, the impact will live on. The average mortgage rate only really started to fall rapidly from the middle of this year.”  Tuffley said it is now more than halfway through its likely fall from peak to trough, but that means there is still a substantial portion of NZ home borrowers who stand to benefit further.  There are already signs of a greater ability and willingness to spend. In the September quarter, consumers went nuts in electrical and electronics stores. Not only that, they were busily buying up cars to rush themselves around to all the sales, he said. Overall card spending, on a seasonally adjusted three-month average, is up 3.9% compared to the same time last year.

Market leader Fisher and Paykel Healthcare was up 25c to $38.19; Fletcher Building increased 8c or 2.2% to $3.7; Westpac added 55c to $43.76; Skellerup collected 11c or 2.1% to $5.36; and Fonterra Shareholders’ Fund gained 15c or 1.91% to $8.

Vital Healthcare Property Trust rose 13c or 7.45% to $2.01 after being added to the global real estate FTSE EPRA Nareit Index, and passive investment funds tracking the index were buying up. Elsewhere in the property sector, Stride was up 4.5c or 3.27% to $1.42, and Investore was down 3c or 2.46% to $1.19. Ebos Group decreased 41c to $27.69; Contact Energy eased 11c to $9.28; Gentrack was down 20c or 2.13% to $9.20; and Eroad declined 4.5c or 3.46% to $1.25.

Sky TV fell 28c or 7.98% to $3.23 over concerns that it may lose the HBO streaming content should the NZ$125 billion Netflix takeover of Warner Bros. Discovery gain regulatory approval. Netflix has agreed to buy the Warner Bros. studios and streaming business in a cash-and-stock deal, and the transaction will occur after Warner Bros. spins off its cable networks, such as CNN and TNT, into a separate, listed company, with completion targeted in the third quarter of next year.

Tourism Holdings, up 1c to $2.60, told the market it was closing its recreational vehicle manufacturing factory in Brisbane on Dec 19 and switching all production to Action Manufacturing in Hamilton. It means 110 frontline and support roles will be cut in Australia. Tourism Holdings said the NZ production will immediately capture the cost advantage opportunities and maintain strong overhead leverage despite expected lower overall manufacturing volumes across Australasia.

Source: Business Desk

Ahead of the local open SPI futures were 24 points lower at 8609.

- close [Morningstar with AAP]: Australia's share market has narrowly broken a four-day winning run, as investors hold back ahead of a Reserve Bank meeting, hoping for any signs a Santa rally may still be possible.

The S&P/ASX200 fell 10.2 points on Monday, down 0.12 per cent, to 8,624.4, as the broader All Ordinaries gave up 11.1 points, or 0.12 per cent, to 8,915.

Traders struggled to get excited by the price action, which came off the back of a quiet week but ahead of key central bank meetings in the coming days, IG market analyst Tony Sycamore said.

"But the big one, of course is the RBA and that's, I think, why our market has continued to struggle last week and really hasn't been able to do too much today," Mr Sycamore told AAP.

"And the rates market now is getting out towards where we've got a full rate hike priced in by August and no less two hikes priced for 2026."

Weakness in raw materials, energy stocks and utilities led eight of 11 local sectors lower, while only communications stocks offered some decent resistance, lifting 1.1 per cent.

Online real estate platform owner REA Group was the best of the bigger telecommunications players, rallying 1.9 per cent to $193.88, catching a bid after hitting a 14-month low the week before.

The heavyweight financials sector managed to carve out a modest 0.2 per cent gain, as CBA and Westpac improved, but ANZ and NAB fell behind.

Raw materials weighed heavily on the bourse, fading 0.8 per cent as a surging China trade balance dragged iron ore prices lower to $US106.45 a tonne.

BHP fell 0.8 per cent to $44.47 while Rio Tinto lost 0.9 per cent to $137.18.

Gold stocks were also in the red, as gold prices clung to around $US4,207 ($A6,335) an ounce, sending names like Evolution, Newmont and Perseus more than two per cent lower.

Liontown Resources was the top-200's best performer, up more than 15 per cent on Monday to $1.52.

Pilbara Minerals enjoyed a six per cent boost from the renewed interest in lithium plays, while Lynas Rare Earths slipped 3.8 per cent to $13.61 but showed signs of interest as its approached November's low.

Energy stocks dipped 0.4 per cent lower despite segment giants Woodside and Santos edging either side of break-even, as most coal producers and uranium plays sold off by between two and four per cent.

Uranium enrichment technology Silex Systems was the worst performer of the top-200, tumbling 7.7 per cent and wiping most of the gains from the previous week's rally.

With the Reserve Bank all but certain to hold the cash interest rate at 3.6 per cent on Tuesday, investors will be combing official speeches for hints of what lies ahead for borrowing costs and the broader economy.

"The RBA heads into its final meeting of the year this week, facing a completely different set of challenges than its global peers," eToro market analyst Farhan Badami said.

"Markets expect a hold this week, but it's likely that the RBA will strike a hawkish tone, and that will certainly put markets under pressure."

The Australian dollar is trading at 12-week highs against the greenback, buying 66.46 US cents, up from 66.23 US cents on Friday at 5pm.

ON THE ASX:

The S&P/ASX200 fell 10.2 points, or 0.12 per cent, to 8,624.4

The broader All Ordinaries gained 11.1 points, or 0.12 per cent, to 8,915

The NZX 50 added 3.54 points (0.03%) to 13489.86

[Morningstar with Dow Jones]:

U.S. stocks ended lower. The DJIA slipped 0.4% to 47,739.32, the S&P 500 fell 0.3% to 6,846.51 and the Nasdaq declined 0.1% to 23,545.90.

Among S&P 500 companies, the top three gainers were Paramount Skydance Corp PSKY surging 9.02%, Warner Bros. Discovery Inc WBD jumped 4.41%, and Micron Technology Inc MU lifted 4.09%.

The biggest decliners were Air Products and Chemicals Inc APD which dropped 9.45%, Dollar General Corp DG fell 6.13%, and Incyte Corp INCY lost 5.68%.

Asia

Chinese shares closed higher. The benchmark Shanghai Composite Index lifted 0.5% to 3,924.08 and the Shenzhen Composite Index added 1.2% to 2,498.92.

Hong Kong shares ended lower. The benchmark Hang Seng Index slipped 1.2% to 25,765.36.

Japanese shares ended higher. The Nikkei Stock Average gained 0.2% to 50,581.94.

India shares ended lower. The BSE SENSEX fell 0.7% to 85,102.69.

Europe

Stocks in the U.K. finished lower. The FTSE 100 Index dropped 0.2% to 9,645.09. In Europe, shares closed mixed. The Germany's DAX added 0.1% to 24,046.01, and the France's CAC 40 fell 0.1% to 8,108.43