A sharp fall in unemployment, showing the economy is in great shape, boosted the New Zealand sharemarket, which gained more than half a per cent.
The S&P/NZX 50 Index jumped 96.79 points or 0.76 per cent to 12,797.29, producing a solid rise in the afternoon.
There were 75 gainers and 55 decliners over the whole market, and trading was strong with 48.59 million shares worth $196.46 million changing hands. Heading the individual list was the trade of 6.4m units worth $25.52m in the Smartshares US Large Value Exchange Traded Fund.
The unemployment rate fell 0.6 per cent to 4 per cent in the June quarter – the largest quarterly fall in 35 years – after being at 5.3 per cent in September last year.
Economists had forecast 4.4 per cent in the June quarter, and are now predicting three official cash rate (OCR) rises this year: this month, in October and November, and reaching 1.25 per cent from 0.25 per cent in the middle of next year.
"We've flown past full employment, and the economy is becoming quite overheated," said ANZ Research's report.
Mark Lister, head of private wealth research with Craigs Investment Partners, said the fall in unemployment on the back of a strong economy provided a good backdrop for most businesses.
"It seals the deal for OCR hikes and the Reserve Bank will now move more quickly than expected. A strong economy goes hand in hand with higher interest rates," he said.
"We will be cranking up interest rates while the US, Australia and UK will be staying the course, and this will no doubt push up the NZ dollar and provide a headwind for some exporting companies.
"But businesses at home are in a good space, with customers having jobs and income and feeling comfortable," said Lister.
The NZ dollar strengthened, rising from US70.12c to 70.52c.
Strong exporters Fisher and Paykel Healthcare were up 6c to $32.90, and a2 Milk increased 12c or 1.91 per cent to $6.41. Mainfreight recovered 89c to $84; Ebos Group increased 46c to $31.57; Mercury Energy rose 11c to $6.95; and Restaurant Brands gained 17c to $15.80.
The property companies had a good day, despite the spectre of increased interest rates. Argosy rose 3c or 1.89 per cent to $1.62; Goodman Property Trust increased 2c to $2.455; Investore was also up 2c to $2.02; Kiwi Property gained 1.5c to $1.185; Precinct Properties was ahead 1.5c to $1.64; Property for Industry picked up 3c to $2.90; Stride collected 4c to $2.51; and Vital Healthcare was up 4.5c to $3.165.
Vital Healthcare Property Trust is expecting a $175m revaluation gain for the second half of the financial year ending June, taking its portfolio value to $2.63 billion. Vital Healthcare enjoyed a $61m revaluation gain for the first half ending December, and the portfolio value will increase $235m or 11.3 per cent for the full year.
Retirement village operators Ryman Healthcare rose 25c or 1.89 per cent to $13.50; Summerset Group Holdings was down 6c to $13.11; Arvida gained 4c or 1.92 per cent to $2.12; and Oceania Healthcare increased 2c to $1.49.
Infratil climbed 16c or 2.19 per cent to $7.46; Skellerup Holdings was up 8c to $5;09; Scales Corporation picked up 9c or 2.01 per cent to $4.56; Move Logistics Group (previously called TIL Logistics) increased 5c or 2.86 per cent to $1.80; and New Zealand Refinery gained 4c or 4.88 per cent to 86c.
Chorus was down 8c to $6.18; EROAD fell 17c or 2.61 per cent to $6.35; Michael Hill International decreased 3c or 3.23 per cent to 90c; Harmoney declined 8c or 4.21 per cent to $1.82; and Cavalier shed 3c or 5.08 per cent to 56c.
Air New Zealand has increased its expected losses for the 2022 financial year to no more than $530m, up from $450m in its June forecast. The airline said it has not drawn on its $1.5 billion funding facility since February and has $1.15b available under the facility. Air NZ's share price slipped 1c to $1.48.
Serko, unchanged at $7.10, told the market local travel bookings remain strong, at 166 per cent of 2019 volumes for June and 137 per cent for July. But Australian domestic bookings fell 56 per cent in June compared with the same month in 2019, and down 35 per cent in July.
Plexure Group fell 7c or 10.14 per cent to 62c after the sudden resignation of chief executive Craig Herbison who is leaving the online marketing company immediately. Herbison also resigned as a director of the company.
On Wall Street overnight, the Dow Jones Industrial Average and S&P 500 Index reached new highs, rising 0.8 per cent to 35,116.40 points and 0.82 per cent to 4423.15 respectively.