NZ Sharemarket Down 0.2% As Inflation Bites

The New Zealand sharemarket had a topsy-turvy day yesterday after the inflation rate hit its highest level in more than two years. The S&P/NZX 50 Index fell to an intraday low of 13, 635.78 after Stats NZ announced annual inflation was 4.1% at the end of the June quarter. The index then climbed to 13,7818.56 but had a late fall and closed at 13,656.03, down 40 points or 0.29%. There were 55 gainers and 73 decliners on the main board with 30 million shares worth $129.1m changing hands.

The Consumers Price Index (CPI) increased 1.5% in the June quarter, with petrol and diesel making up two-thirds of the quarterly rise. The inflation rate of 4.1%, up from 3.1% at the end of the March quarter, was above the Reserve Bank of NZ’s (RBNZ) forecast of 3.9% and the highest since 4.7% at the end of the December quarter in 2023. Inflation peaked at 7.3% in June 2022 and fell as low as 2.2% in September 2024. The NZ dollar strengthened slightly against the American greenback, rising from US58.29c to 58.73c.

Sunny Nguyen, an economist with Moody’s Analytics, said NZ inflation was overwhelmingly an imported-energy story – tradable inflation nearly doubled to 4.9%, and stripping fuel out left a 0.5% quarterly rise and a 2.9% annual rate, back inside the target band. “Beneath the spike, the domestic picture is more encouraging than the headline suggests. Non-tradable inflation eased to 3.4%, and core measures excluding food and energy held at 2.5%, showing little sign that the fuel shock is bleeding into other prices. “The persistent pressures are concentrated in administered prices, electricity and council rates, which grind higher regardless of demand,” Nguyen said.

Fisher & Paykel Healthcare was down 59c to $39.11; Ebos Group declined 38c to $22.10; Chorus decreased 17c to $9.62; Freightways eased 23c to $13.79; and a2 Milk shed 15c or 1.75% to $8.42.  Other decliners were Third Age Health down 10c or 2.17% to $4.50; Serko decreasing 5c or 3.73% to $1.29; and Hallenstein Glasson shedding 18c to $10.22.

Infratil gained 33c or 2.18% to $15.47; Gentrack increased 10c or 2.74% to $3.75; Green Cross Health collected 3.5c or 1.79% to $1.99; and Eroad improved 3c or 3.03% to $1.02. The property sector was stronger. Argosy increased 3c or 2.83% to $1.09; Kiwi gained 1.5c to 98c; Investore added 2c or 1.87% to $1.09; and Precinct added 1.5c to $1.10.

Contact Energy was up 5c to $9.25 after reporting steady electricity and gas sales of 495GWh in June compared with 410GWh for the same month last year. On July 16, South Island controlled storage was 145% of mean and North Island 123%.

AFT Pharmaceuticals, up 1c to $3.94, told the market that the US Food and Drug Administration has issued tentative approval for Scomara cream to treat Facial Angiofibromas in Tuberous Sclerosis. AFT said the launch would be delayed until at least March 2029, but the tentative approval is a catalyst to develop new markets for the medicine outside the US. Private Land and Property Fund gained 3.8c or 2.99% to $1.30 after the value of three vineyards in Hawke’s Bay decreased by $3.87m, reducing the unit price value to $1.274, from $1.298.

Source: Business Desk

Ahead of the local open SPI futures were 8 points higher at 8801.

- close [Morningstar with AAP]: Australia's share market has pared its early losses to end the session roughly flat, as oil prices ease on hopes diplomacy could end a recent re-escalation of the US-Iran conflict.

The S&P/ASX200 rose two points on Tuesday, up 0.02 per cent to 8,793.3, as the broader All Ordinaries gained 2.2 points, or 0.02 per cent, to 8,976.9.

The top-200 dropped more than 58 points in early trade as oil prices clung to recent gains and strikes between Iran and the US continued.

However, crude eased in the afternoon and gold prices bounced on reports Iranian officials received a ceasefire proposal from US mediators, potentially opening the door to a permanent peace agreement.

While the uncertainty in the Middle East had contributed to the Australian market's lack of direction, traders were also holding back ahead of key economic updates and results, IG analyst Tony Sycamore said.

"Over the next week we'll get labour force and inflation updates - both critical inputs for the RBA ahead of its next interest rate meeting - while the August ASX200 earnings season is also fast approaching in the rear-view mirror," he said.

"With so much on the horizon, it makes sense that many who are already positioned are happy to hold tight for now, while those looking to open fresh positions are choosing to wait a couple of weeks for more clarity."

While the tech sector outperformed with a 3.3 per cent charge, the heavily-weighted materials also supported the bourse, up 1.3 per cent as gold and copper prices rallied into the afternoon.

The All Ordinaries gold sub-index soared 3.6 per cent as the precious metal firmed to $US4,073 ($A5,810) an ounce after ceasefire hopes softened the outlook for global inflation, and therefore for interest rates.

BHP shares jumped to $58.29 with copper's surge to its highest price in five weeks, while Rio Tinto traded flat and Fortescue lost 1.3 per cent as iron ore futures lingered near mid-February lows.

South32 rallied for a second day on the back of its June quarter trading update - it has gained more than 11 per cent since Friday's market close.

The IT segment rally was led by data centre group NextDC, which charged more than seven per cent higher after increasing its contracted utilisation, with a rebound in South Korea's tech-heavy KOSPI index supporting an uplift in global technology stocks.

The heavyweight financials sector fell for a third straight session as investors continued to take profits on a recent rally in the major banks and Macquarie.

In company news, Telix Pharmaceuticals improved after it lifted its June quarter revenue by more than a fifth year-on-year in an otherwise glum session for health care stocks.

The Australian dollar is buying 70.18 US cents, up from 69.90 US cents on Monday at 5pm AEST.

ON THE ASX:

The S&P/ASX200 rose two points, or 0.02 per cent, to 8,793.3

The broader All Ordinaries improved by 2.2 points, or 0.02 per cent, to 8,976.9

The NZX 50 added 4.98 points (0.04%) to 13661.01

Companies Holding Annual General Meeting (ASX 300):

Australian Agricultural Company Limited

[Morningstar with Dow Jones]:

U.S. stocks ended higher. The DJIA climbed 0.7% to 52,224.64, the S&P 500 lifted 0.9% to 7,509.20 and the Nasdaq added 1.3% to 25,837.21.

Among S&P 500 companies, the top three gainers were SanDisk Corp SNDK surging 14.27%, Western Digital Corp WDC jumped 12.51%, and Micron Technology Inc MU lifted 12.17%.

The biggest decliners were Danaher Corp DHR which dropped 10.99%, MSCI Inc MSCI fell 10.14%, and Tyler Technologies Inc TYL lost 5.73%.

Asia

Chinese shares closed higher. The benchmark Shanghai Composite Index added 1.8% to 3,864.37 and the Shenzhen Composite Index added 3.6% to 2,487.72.

Hong Kong shares ended flat. The benchmark Hang Seng Index was unchanged at 25,132.29.

Japanese shares ended higher. The Nikkei Stock Average climbed 3.3% to 66,232.19.

India shares ended lower. The BSE SENSEX declined 0.3% to 77,470.11.

Europe

Stocks in the U.K. finished higher. The FTSE 100 Index added 0.6% to 10,585.91. In Europe, shares closed higher. The Germany's DAX rose 0.7% to 25,011.35, and the France's CAC 40 gained 0.3% to 8,363.14