Market close: Small gain for sharemarket as investors remain cautious

A2 Milk and Synlait worked in tandem with strong rises, up 43c or 3.88 per cent to $11.50 and 12c or 2.55 per cent to $4.83 respectively. Photo / File

The New Zealand sharemarket had a small gain as investors continued to remain cautious before the latest financial reporting season which begins in a fortnight.

The S&P/NZX 50 Index again drifted between negative and positive territory, finally ending the day up 50.53 points or 0.38 per cent at 13,374, after reaching an intraday low of 13,287.89.

There were 67 gainers and 75 decliners over the whole market on volume of 73.09 million share transactions worth $209.76 million. The volume was boosted by the trade of 14.64m units worth $42.32m in the S&P/NZX 50 Exchange Traded Fund.

Jeremy Sullivan, investment adviser with Hamilton Hindin Greene, said the market was pretty directionless and was cautiously watching the United States for guidance.

"There is an amount of uncertainty out there. The US markets have started their reporting season and then we will move into ours, which kicks off in 14-15 days," Sullivan said. "The NZ dollar is remaining stubbornly high and this won't please our exporters, and interest rate cuts are less likely with wholesale rates rising."

He said Microsoft put out a strong result after trading closed in the US overnight and this might provide a boost.

The software giant reported a 17 per cent increase in sales to US$43.1 billion ($59.64b) for its second quarter and its net income rose 30 per cent to US$15.5b, ahead of Wall Street's expectation of US$12.6b income and US$40.2b sales. Microsoft's share price climbed more than 4 per cent in after-hours trading.

The leading US indices were flat, the Dow Jones Industrial Average increasing 0.074 per cent to 30,937.04; the S&P 500 Index up 0.15 per cent to 3849.62; and the Nasdaq Composite edging ahead 0.073 per cent to 13,626.06.

Back home, a2 Milk and Synlait worked in tandem with strong rises – after Synlait announced this week it is increasing its forecast milk price to $7.20kg milk solids, from $6.40kgMS, for the 2020-21 season, driven by the strong rise in dairy commodity prices. Synlait rose 12c or 2.55 per cent to $4.83, and a2 Milk was up 43c or 3.88 per cent to $11.50 on trade worth $13.09m.

Market leader Fisher and Paykel Healthcare had a more settled day, rising 45c to $35.20 on trade worth $20.3m; and Freightways broke through the $11 mark for the first time during the day before finishing at $10.99, up 9c.

Other gainers were takeover target Infratil, up 10c to $7.85; Serko rising 19c or 3.45 per cent to $5.69; retirement village operator Arvida gaining 4c or 2.29 per cent to $1.79; Foley Wines increasing 10c or 5.29 per cent to $1.99; Just Life climbing a further 12c or 13.19 per cent to $1.03; and Scott Technology up 9c or 3.98 per cent to $2.35.

The energy stocks again had a mixed day. Contact was down 16c or 1.8 per cent to $8.74; Meridian fell 15c or 1.9 per cent to $7.75, while Mercury rose 17c or 2.36 per cent to $7.37; Trustpower increased 10c to $8.76; Genesis gained 6.5c to $3.895; and Vector rose 6c to $4.31.

In its second-quarter operating report (ending December), Meridian said New Zealand customer numbers were up 6.1 per cent compared with the previous corresponding period, and retail sales volumes increased 13.6 per cent at a 3.6 per cent higher average price. New Zealand generation was 1.2 per cent lower at a 15.8 per cent higher average price.

Fletcher Building's strong run faltered with a loss of 20c or 3.05 per cent to $6.35; Mainfreight shed 40c to $68.40; and South Port New Zealand lost all that it gained the day before, falling 31c or 23.56 per cent to $8.39.

Co-operative Livestock Improvement Corporation (LIC) reported a 10.4 per cent increase in net profit to $33.43m for the six months ending November on revenue of $169.68m, up 3.8 per cent. LIC said there was strong sales growth in premium artificial breeding options, and animal health and diagnostics testing. Its share price rose 3c or 3.7 per cent to 84c.