The New Zealand sharemarket provided a muted reaction to the half per cent hike in the official cash rate that pushes up interest rates to combat the inexorable rise of inflation.
The S&P/NZX 50 Index had a slight dip following the Reserve Bank's early afternoon announcement but then shrugged its shoulders at the expected result and rose again.
The index closed at 11,875, down 14.16 points or 0.12 per cent, after reaching an intraday high of 11,890.22 and low of 11,828.39.
There were 65 gainers and 75 decliners on the main board with 53.7 million shares worth $158.6 million changing hands.
The ANZ Bank is now predicting that inflation reached 7.4 per cent in the March quarter, up from 5.9 per cent at the end of last year. Food prices added fuel, rising 7.6 per cent in March compared with the same month last year – the largest increase since the year ending July 2011.
Matt Goodson, managing director of Salt Funds Management, said the NZ dollar was weaker after the Reserve Bank move, suggesting the market was expecting both a 50 basis points rise in the cash rate and another one next month.
"The bank has done the right thing today by moving quickly to tighten its monetary policy. It's easy when inflation is well above its target, and the risk in not moving aggressively is that wage inflation will start creeping in, amongst all the other issues," Goodson said.
"With interest rates rising, there are now alternatives to investment with term deposits and bond yields increasing."
The NZ dollar was trading at US68.2c against the American greenback at 5.45pm after falling from an intraday high of US69.03c.
Market leader Fisher and Paykel Healthcare was down 40c or 1.74 per cent to a new two-year low of $22.60 on trade worth $11.9m.
Meridian decreased 10c or 2.04 per cent to $4.80; Freightways shed 10c to $12.39; Mainfreight declined $1.51 or 1.85 per cent to $80; Skellerup Holdings decreased 16c or 2.75 per cent to $5.66; and Briscoe Group fell 12c or 2.03 per cent to $5.80.
Trustpower slumped 41c 5.61 per cent to $6.90 after announcing a smaller-than-expected special dividend of 35c a share following the sale of its retail business to Mercury for $441m, expected to be completed on May 1. Trustpower will be renamed Manawa Energy and generate 5 per cent of the country's electricity with volumes of 1915GWh.
On the day Australian visitors returned to New Zealand, Auckland International Airport was up 14.5c or 1.93 per cent to $7.65, Millennium & Copthorne Hotels New Zealand increased 7c or 2.83 per cent to $2.54; and Tourism Holdings edged ahead 1c to $2.88.
Contact Energy collected 11c to $8.01; Spark increased 7c to $4.85; Vector gained another 5c to $4.31; Michael Hill International was up 5c or 3.85 per cent to $1.35; DGL Group rose 26c or 7.9 per cent to $3.55; and Bremworth increased 5c or 9.43 per cent to 58c.
Port of Tauranga gained 16c or 2.5 per cent to $6.57 after being upgraded by one broker as an investment inflation hedge; Napier Port increased 9c or 3.1 per cent to $2.99; and South Port New Zealand was up 10c to $9.
Chorus increased 15.5c or 2.14 per cent to $7.40 after reporting total fibre connections increased 21,000 to 939,000 during the third quarter. Fibre update has grown from 67 per cent to 69 per cent.
Asset Plus rose 5c or 19.61 per cent to 30.5c after confirming the sale of 35 Graham St in Auckland to a private investor for $65m, representing a premium to current value of $62.6m. Settlement is in December next year and provides certainty for Asset Plus' Albany Munroe Lane development.
Other gainers were Accordant Group up 7c or 3.48 per cent to $2.08; Gentrack increasing 9c or 35.29 per cent to $1.79; and Third Age Health Services gaining 5c or 1.82 per cent to $2.80.
NZ King Salmon Investments, hit by a rise in sea farm mortalities, plunged 17c or 19.77 per cent to 69c after reporting a full-year loss of $73.2m on revenue of $174.53m, up 83 per cent.
King Salmon is launching a $60.1m renounceable rights offer, 2.85 new shares for every one held at a heavily-discounted issue price of 15c a share, to strengthen its balance sheet.
Transport technology firm Eroad, searching for a new chief executive, told the market sales of units increased 5258 to 208,697 in the fourth quarter ending March, representing annual growth of 10.3 per cent. Eroad's share price slipped 13c or 4.09 per cent to $3.05.
Chatham Rock Phosphate has completed a private capital raising of $2.52m at 19.5c a share and its share price gained 2c or 10 per cent to 22c. Some of the money will go towards completing the permit for the French Polynesia Avenir Makatea phosphate project.