Mainfreight rose 81c to $70.50. Photo / Supplied
The New Zealand sharemarket completed a hat-trick of solid gains, with investors switching to growth stocks as wholesale interest rates continue to fall.
The S&P/NZX 50 Index followed the same pattern as the day before, having a strong afternoon after a sluggish morning. The index closed at 11,141.07, up 175.9 points or 1.6 per cent, and rising 1 per cent or more for the third successive day.
It was the biggest single-day rise in more than four months, and the index is moving further away from the 20 per cent bear market boundary, having fallen about 14.5 per cent so far this year. But there is still plenty of uncertainty out there.
There were 87 gainers and 49 decliners over the whole market on steady volume of 46.34 million share transactions worth $135 million.
Investors fear an economic recession may be coming but that could lead to a dampening in interest rate rises and work in favour of growth stocks.
The technology-driven Nasdaq Composite in the United States was up 1.75 per cent to 11,322.24 points overnight.
"It's the classic bad news is good news," said Matt Goodson, managing director of Salt Funds Management. "Cyclical stocks are being sold off on recession fears, and interest rate-sensitive and growth shares are outperforming."
He said bond yields have dropped and the longer end of the market tends to peak two months before inflation. "Inflation does appear to be close to peaking but the problem is central banks need to keep tightening to within their inflation target. And this could tip economies into recession."
The 10 Year New Zealand Government Bond yield was 3.57 per cent, down 12 basis points, and the two-swap rate was 2.845 per cent, down from 3.002 per cent on June 30.
The crude oil price had its biggest fall in four months, declining 10 per cent to US$97.81 a barrel.
At home with Covid cases rising, four pandemic beneficiaries – all growth stocks - had strong gains. Fisher and Paykel Healthcare was up 69c or 3.37 per cent to $21.19, its highest level in two months; Freightways rose 39c or 4.13 per cent to $9.83; Ebos Group increased 86c or 2.26 per cent to $38.87; and Mainfreight collected 81c to $70.50.
Fletcher Building was up 14c or 2.81 per cent to $5.13; a2 Milk increased 7c to $5.05; Port of Tauranga collected 11c to $6.59; Summerset Group Holdings gained 34c or 3.56 per cent to $9.88; and Ryman Healthcare was up 10c to $8.90.
Synlait Milk, gaining 11c or 3.42 per cent to $3.33, has forecast a milk price of $9.50 per kg/MS for the 2022/23 season, up from $9.30 in the current year. Fonterra Shareholders' Fund was up 7c or 2.24 per cent to $3.20.
Dividend stocks Spark was up 8c to $4.95; Chorus increased 10c to $7.315; Property for Industry gained 6c or 2.46 per cent to $2.50; and Vital Healthcare Property Trust collected 5.5c or 2.08 per cent to $2.70.
Mercury Energy improved 15c or 2.64 per cent to $5.83; Contact was up 15c or 2.06 per cent to $7.43; and Infratil gained 16c or 2.07 per cent to $7.90.
Briscoe Group rose 30c or 5.56 per cent to $5.70; Eroad rebounded a further 23c or 14.29 per cent to $1.84; NZX gained 4c or 3.33 per cent to $1.24; and Comvita increased 67c or 2.2 per cent to $3.25.
More growth stocks Serko rose 21c or 5.61 per cent to $3.95; Pushpay Holdings improved 4c or 3.23 per cent to $1.28; Rakon was up 5c or 4.07 per cent to $1.28; and Plexure Group gained 0.006c or 3.33 per cent to 18.6c.
SkyCity Entertainment was down 6c or 2.16 per cent to $2.72; Skellerup Holdings declined 9c to $5.11; Turners Automotive decreased 11c or 2.93 per cent to $3.65; and NZME was down 5c or 3.79 per cent to $1.27.
Radius Residential Care fell 4c or 10.26 per cent to 35c; Livestock Improvement Corporation was down 4c or 2.76 to $1.41; and Allied Farmers declined 5c or 6.33 per cent to 74c.
With the crude oil price falling, transtasman fuel supplier Ampol was down $1.54 or 4 per cent to $37.