The S&P/ASX 200 Index fell as much as 1.1% but by 6pm NZ time was trading at 7770 points, down 0.88%.
The CPI increase raised fears that interest rate cuts will be delayed. The Reserve Bank of Australia has even said it won’t hesitate to raise its official rate – for a 14th time in this cycle – if it loses confidence that inflation can fall back within its 2-3% target by the end of next year.
Matt Goodson, managing director of Salt Funds Management, said the Australian CPI showed there is still widespread inflation pressure, and this followed surprisingly high inflation in Canada after their interest rate cut.
“It’s a messy turning point for how central banks are positioned in the fight against inflation.”
Nvidia rebounded 6.76% to US$126.09 ($206) as the Nasdaq Composite index rose 1.26% to 17,717.65 points and S&P 500 was up 0.39% to 5469.3.
At home, a2 Milk led the market higher, rising 19c or 2.71% to $7.21. However, Synlait continued to drift, down 4.5c or 15.79% to a new low of 24c.
Goodson said there was nervousness ahead of Synlait’s special meeting to approve the $130m loan from Bright Dairy and whether it had the support from a2 Milk.
“No one is quite sure where a2 Milk is coming from, but what is crystal clear is a capital raising is required by Synlait.”
Mainfreight increased $1.36 or 2.02% to $68.68 on the back of a strong update from FedEx in the US.
Fisher & Paykel Healthcare gained 27.5c to $30.27; Spark added 6c to $4.11; Auckland International Airport collected 7.5c to $7.835; Gentrack was up 18c or 1.76% to $10.38; and Skellerup rose 14c or 3.68% to $3.94.
In the energy sector, Meridian was up 22.5c or 3.59% to $6.495 and Mercury climbed 11c to $6.71.
Restaurant Brands collected 7c or 2.38% to $3.01; Vista Group increased 8c or 3.6% to $2.30; Arvida Group was up 2c or 2.08% to 98c; PGG Wrightson rebounded 10c or 6.37% to $1.67 and Geneva Finance rose 5.5c or 27.5% to 25.5c.
Other gainers were Precinct Properties up 3.5c or 3.15% to $1.145; Serko rising 8c or 2.53% to $3.24; AFT Pharmaceuticals increasing 7c or 2.32% to $3.09; and Fonterra Shareholders’ Fund adding 7c or 1.77% to $4.02.
Transport technology firm Eroad, up 1c to $1.01, announced the signing of its largest Australasian customer, which it could not name. The three-year contract, with an option for two further years, provides 5000 monitoring units for the customer’s Australian fleet, and the renewal of 6000 units for the New Zealand fleet.
SkyCity fell 6c or 4.1% to $1.40; Air New Zealand was down 1c or 1.85% to 53c; Move Logistics declined 2c or 6.67% to 19.6c; Winton Land decreased 5c or 2.51% to $1.94; and Radius Residential Care gave back 1.4c or 6.67% to 19.6c.
Vital Healthcare Property Trust, unchanged at $1.80, told the market the portfolio valuation for the six months ending June is likely to be a modest 1% decline, representing a 2% decrease in net tangible assets since the end of March.
Vital Healthcare said $87m of non-core asset sales have been contracted since April at a 2% discount to book value, and three current developments – two in Australia and one in Auckland – have been completed and 81% leased.
Bremworth, down 0.005c to 37c, has received a further $16.5m insurance payment for the Cyclone Gabrielle damage to its Napier spinning plant. The total payments to date are $62m and Bremworth said they are being applied to the reinstatement of the plant.
New Talisman Gold Mines, down 0.001c or 3.85% to 2.5c, has obtained a five-year access agreement with the Conservation Department for its mine in the Karangahake Gorge. New Talisman is completing a capital raise next month before its operator Terra Firma Mining can begin production.
