Market close: Index surges as US inflation appears to have peaked

New Zealand’s benchmark index was buoyed by weaker-than-expected inflation figures out of the United States. Photo / AP

Ebos Group led New Zealand’s benchmark index higher on Friday, a day in which it was buoyed by weaker-than-expected inflation figures out of the United States.

The S&P/NZX 50 index increased 219.83 points, or 1.98 per cent, to 11,311.750.

Across the main board, 111 shares rose and 23 fell. Turnover was $148.5 million.

Medical supplies and animal healthcare company Ebos Group led the top 50 higher, closing up nearly 8 per cent at $40.44.

The company had been admitted into an MSCI small cap index, which triggers a raft of passive buying, Brad Gordon, director, and senior investment adviser at Hobson Wealth Partners told BusinessDesk.

Outside the top 50, New Zealand King Salmon jumped nearly 18 per cent, or 4c, to 26c after it came off a trading halt where it announced it had received resource consent to begin farming the country’s first open-ocean finfish site, in Cook Strait.

Acting chief executive Graeme Tregidga described it as a significant decision for NZ’s aquaculture sector.

Other increases included Pacific Edge up 6.8 per cent to 47c. My Food Bag jumped 5.2 per cent to 60c after it announced Mark Winter would remain on as chief executive, having been acting since Kevin Bowler left last month. Eroad ended the day up 5 per cent to $1.47.

Property companies were among the rises too, with Precinct Properties up 4.1 per cent to $1.26 and Argosy Property increasing 3.8 per cent to $1.21. Investore Property was also 3.4 per cent to $1.50.

The NZ market followed the lead of US markets which rallied overnight (NZ time) after inflation figures came in slower than expected at 7.7 per cent, below forecasts of 8 per cent. The S&P500 ended the day up 5.5 per cent and the Nasdaq jumped 7.3 per cent.

Back home and out of the few decliners there were, Synlait Milk was down 2.8 per cent to $3.05. Power companies fell with Genesis Energy down 1 per cent to $2.7, Manawa Energy down 1 per cent to $5.05 and Mercury down 0.6 per cent to $5.34.

Cannabis companies were also among the decliners with Rua Bioscience down 4 per cent to 23c and Greenfern Industries down 1.9 per cent to 10c.

The rally was also seen in currency markets, with the NZ dollar trading at 60.05 US cents at 3pm in Wellington, up from 58.89 cents on Thursday. The trade-weighted index was at 70.89 down from 70.24.

The last time the Kiwi broke 60c was in mid-September.

A note from currency trader OFX said the question now was could those gains be sustained.

The scale of the move emphasised where short positions were concentrated and suggested a further depreciation in the broader USD outlook would support ongoing and outsized NZD upside.

”Up nearly 2 per cent overnight [Thursday], the NZD will now look to consolidate a break above US60c. Attentions now turn to domestic manufacturing PMI data and US consumer sentiment for direction into the weekly close,” they wrote.

- BusinessDesk