Market close: Blue chip stock profit-taking drags down NZ sharemarket

Port of Tauranga decreased 13c or 1.85 per cent to $6.91. Photo / NZME

The stock investors are uncertain about, a2 Milk, had another strong rise as the New Zealand sharemarket, still lacking impetus, suffered another small drop.

It was quiet on the corporate news front, and the S&P/NZX 50 Index slipped 11.12 points or 0.09 per cent to 12,747.80. There were 77 gainers and 56 decliners over the whole market on volume of 49 million share transactions worth $149.62 million.

As a debate broke out among economists about whether interest rates will rise soon, the market is eagerly waiting for next Wednesday's Reserve Bank monetary policy review.

ANZ chief economist Sharon Zollner said a lot has changed since the Reserve Bank's late May statement and the inflation risks were becoming strongly skewed towards an increase in the official cash rate (OCR).

"Now that the market is there, we are forecasting the bank to start hiking in November, lifting the OCR in steady steps to 1.75 per cent (from 0.25 per cent) by February 2023," she said.

But John Carran, investment strategist and economist at Jarden, believes there's no need for the Reserve Bank to rush OCR hikes in the immediate future. He said the recent inflation spike will likely be temporary, global pent-up demand for goods will ease soon, and "the expectations of inflation on longer horizons have remained well-anchored around or just below 2 per cent."

Greg Smith, head of research for Fat Prophet, said a lot of investors are taking stock ahead of the Reserve Bank decision. "There will probably be no change but everyone will be interested in the rhetoric about dialling back the stimulus down the line."

Global marketer a2 Milk rose 27c or 3.77 per cent to $7.43 on trade worth $12.7m. The stock had slumped from a high of $21.50 on August 18 last year to a low of $5.50 on May 19 this year – and investors are positioning themselves on where they think a2 Milk will land.

The a2 Milk Company, along with other corporates, will be reporting their latest financial results next month and providing an update on their business outlook. The company last provided a trading update on May 10.

There was profit-taking in some blue chip stocks. Fisher and Paykel Healthcare was down 48c to $30.12; Mainfreight fell $1.53 or 1.94 per cent to $77.32; Ebos Group shed 25c to $31.75; Fletcher Building declined 15c or 2.02 per cent to $7.26; Port of Tauranga decreased 13c or 1.85 per cent to $6.91; Chorus lost 6c to $6.36; and Freightways was down 35c or 2.68 per cent to $12.71.

Auckland International Airport rose 18c or 2.44 per cent to $7.55, Ryman Healthcare was 16c to $13.48; and Pushpay Holdings increased 2c to $1.67.

Among the energy stocks, Contact climbed 18c or 2.19 per cent to $8.40; while Mercury fell 19c or 2.04 per cent to $6.71, and Trustpower was down 19c or 2.32 per cent to $8.

Apple exporter Scales Corporation rose 14c or 3 per cent to $4.81; Napier Port, which handles the apple containers, was up 9c or 2.67 per cent to $3.46; and Green Cross Health increased 2c or 1.74 per cent to $1.17.

Eroad climbed 18c or 2.95 per cent to $6.28; CDL Investments New Zealand was up 4c or 3.64 per cent to $1.14; Scott Technology rose 6c or 2.31 per cent to $2.66; Enprise Group collected 7c or 2 per cent to $3.57; and online communications and marketing firm Solution Dynamics increased 6c or 1.98 per cent to $3.09.

Goodman Property Trust fell 6c or 2.44 per cent to $2.40 on the day the company told shareholders at its annual meeting that there was increasing demand from logistics and warehouse tenants for more space because of the surge in online shopping and having to store goods. Goodman had its best statutory profit of nearly $650m since listing in 1999.

Fellow property companies Vital Healthcare was down 7c or 2.08 per cent to $3.29, and Precinct Properties gained 3.5c or 2.13 per cent to $1.68.

Blis Technologies surged 1.8c or 31.71 per cent to 7.5c after forming a partnership with global Swedish company, Probi AB, which will make and sell some of Blis' probiotic products, as well as share in research and development. Blis will issue $9.18m new shares, giving Probi a 13 per cent shareholding and a seat on the board of directors.

Cancer diagnostics company Pacific Edge has reached an agreement with Northland District Health Board and the region's primary health entity Mahitahi Hauora for the use of Cxbladder products. Pacific Edge's share price was unchanged at $1.20.