New Zealand shares gained slightly, treading water ahead of an earnings season where analysts are expecting weaker growth. Port of Tauranga and Meridian Energy gained while Z Energy dropped.
The S&P/NZX50 Index rose 4.76 points, or 0.07 per cent, to 7,055.51. Within the index, 26 stocks rose, 14 fell and 10 were unchanged. Turnover was $103 million.
"The volatility from offshore is going to continue," said David Price, a broker at Forsyth Barr. "We're coming up to earnings season, there was quite a strong rally through January - up 2.5 per cent - so I think we're coming into a results season that's going to have relatively anaemic revenue growth, 2 to 3 per cent, and a lot of companies with negative growth, we're forecasting 18 of the 46 to have negative growth. With the re-rating, there will be quite a number of companies with a risk to the downside from this round."
Z Energy was the worst performer, down 2.2 per cent to $7.12. Energy Minister Judith Collins yesterday indicated there could be an announcement made next week about an inquiry into rising petrol margins.
"It's had quite a bit of negative press in relation to margins, quite a tough-talking stance by Judith Collins," Price said. "Whether anything comes of it remains to be seen, it's quite hard to measure what they're talking about measuring in a consistent form in terms of the way the accounting gets done. It's probably more the focus on net after-tax earnings per litre than the headline margin number. The path of least resistance for that stock has been on the downside."
Restaurant Brands dropped 2.2 per cent to $5.42 and Fletcher Building fell 1.6 per cent to $10.33.
Port of Tauranga was the best performer, up 3.8 per cent to $4.35. Meridian Energy gained 3 per cent to $2.71 and Metro Performance Glass rose 2.2 per cent to $1.89.
Trustpower rose 1.9 per cent to $4.73 after the electricity generator and retailer said a substantial shareholder in its King Country Energy unit was reviewing its 20 per cent stake in the Taumarunui power company.
Auckland International Airport increased 0.2 per cent to $6.85 and Air New Zealand gained 0.5 per cent to $2.11 after the US embassy confirmed dual-national New Zealand passport holders wouldn't be held up at US borders.
Yield stocks, which offer investors steady dividends, gained after an unexpectedly high unemployment rate tempered expectations the Reserve Bank will raise interest rates. Goodman Property Trust was up 1.6 per cent to $1.275, Stride Property increased 1.1 per cent to $1.179 and Chorus advanced 1.4 per cent to $4.11.
Outside the benchmark index, Opus International Consultants was unchanged at 95 cents ahead of the engineering firm's annual earnings scheduled for tomorrow.
AWF Madison, the country's biggest contract labour contractor, was unchanged at $2.70 after government data showed New Zealand's unemployment rate unexpectedly rose to 5.2 per cent in the December quarter as the participation rate increased to a record 70.5 per cent and employment grew 0.8 per cent.
Hellaby Holdings was unchanged at $3.57 after ASX-listed suitor Bapcor crossed the 90 per cent threshold needed to take the NZX-listed diversified investment firm private.
Wellington Drive Technologies jumped 13 per cent, or 2.3 cents, to 20 cents. The energy efficient motor maker said it posted positive earnings on sales growth out of Latin America.