The New Zealand sharemarket had a relief rally, like its overseas counterparts, as the United States Federal Reserve remained calm and Chinese property giant Evergrande began making payments on its multi-billion-dollar debt.
The S&P/NZX 50 Index traded strongly in the afternoon and closed at 13,305.92, up 90.11 points or 0.68 per cent, after hitting a morning low of 13,211.54.
There were 94 gainers and 36 decliners over the whole market, with 35.56 million shares worth $164 million changing hands.
Following its two-day policy meeting, the Federal Reserve decided to stick to its present path of supporting the economy. It did say "moderation in the pace of asset purchases may soon be warranted as long as the US economy progresses as expected".
On Wall Street, the Dow Jones Industrial Average rebounded 338 points or 1 per cent to 34,258.32; the S&P 500 increased 0.95 per cent to 4395.64; and the Nasdaq Composite was up 1.02 per cent to 14,896.85. Across the Tasman, the S&P/ASX 200 Index had gained 1.21 per cent to 7385.2 points at 5.45 pm NZ time.
Greg Main, Jarden wealth management adviser, said investors saw the Federal Reserve statement as a reasonable outcome and this created a positive tone for markets.
The Federal Reserve did allude to winding back quantitative easing to head off inflation and this will see interest rates rising – possibly one next year and three in 2023. Main said New Zealand was already further ahead on that prospect.
He said it looks like the Evergrande crisis has been averted, and one view is that the Chinese government will divide it into different operating companies and become state owned enterprises. "But the full package is yet to be known."
At home, Skellerup Holdings reached a new high, rising 21c or 3.83 per cent to $5.70 after receiving a positive note from a broker who continues to see growth from the rubberware company.
There were other strong rebounds. Mainfreight increased $1.38 to $95.30; a2 Milk rose 18c or 3.19 per cent to $5.82; Synlait gained 9c or 2.74 per cent to $3.40; Ryman Healthcare picked up 47c or 3.21 per cent to $15.13; Serko was up 19c or 2.44 per cent to $7.99; and Bremworth recovered 8c or 12.31 per cent to 73c.
Z Energy, under an Ampol takeover offer, rose 6c or 1.77 per cent to $3.45.
Fisher and Paykel Healthcare was up 24c to $33.28; Contact Energy collected 12c to $8.38; Delegat Group increased 50c or 3.51 per cent to $14.74; Summerset Group Holdings gained 11c to $15; Restaurant Brands rose 20c to $15.75; Auckland International Airport improved 9c to $7.77; and Air New Zealand was up 3.5c or 2.25 per cent to $1.59.
Fonterra Shareholders' Fund rose 20c or 5.26 per cent to $4 following a series of announcements from its dairy co-operative – including an improved annual result for the year ending July. Net profit including asset sales was down $60m to $599m, and operating profit was up $190m to $588m.
Fonterra is looking to sell its Chilean assets and is considering listing its Australian business but retaining a shareholding. Of immediate concern was Fonterra's proposal to retain but cap the size of the shareholders' fund under the revised capital structure.
Other gainers were The Colonial Motor Company, up 30c or 2.94 per cent to $10.50; EROAD moving ahead 14c or 2.47 per cent to $5.80; DGL Group picking up 9c or 3.19 per cent to $2.91; Accordant Group rising 7c or 4.17 per cent to $1.75; Evolve Education increasing 3c or 4.23 per cent to 74c; and Third Age Health Services collecting 5c or 2.01 per cent to $2.54.
Goodman Property Trust fell 3c to $2.54 after telling the market that its latest half-year result will include a revaluation gain of $500m, giving the portfolio a value of $4.3 billion at September 30.
Among other decliners, Ebos Group fell 40c to $35.40; Seeka was down 9c to $5.06; South Port New Zealand decreased 12c to $9.03; Scales Corporation shed 8c to $5.30; Sanford slipped 7c to $5.15; and Gentrack slumped 13c or 7.26 per cent to $1.66.
Cancer diagnostic firm Pacific Edge went into a trading halt after announcing a $80m capital raise – first an institutional placement of $60m and then a $20m retail offer to fund expansion, especially in the United States. It will dual list on the ASX market this Monday and it last traded at $1.47.
Me Today got a surprise when it found out a Chinese distributor of its new acquisition King Honey was holding more inventory than expected, resulting in less sales for its BEE+ products. Me Today is now forecasting nine-month sales of $10m for the King Honey business, and its share price slipped 0.005c or 6.2 per cent to 7.8c.