Dose of reality as investors await Federal Reserve rate cut call - Market close

Seeka was up 1c to $2.46. It said the impact of a Zespri shipment infested by rodents was not expected to materially impact earnings. Photo / John Borren

The New Zealand sharemarket opened the week on a quiet note, recording its third successive fall, as investors expectantly awaited the next move by the US Federal Reserve.

With the Australian exchange closed for the King’s Birthday public holiday, the S&P/NZX 50 Index declined in the morning and then levelled out to close at 11,787.57, down 68.99 points or 0.58 per cent.

There were 53 gainers and 83 decliners over the whole market on light trading of 20.98 million shares worth $75.38 million.

The major United States indices were down over the weekend (NZ time) on hotter-than-expected jobs growth and sticky wage inflation.

Greg Smith, head of retail with Devon Funds Management, said the markets had a dose of reality with the hot jobs number. Their enthusiasm for an interest rate cut in September - following Canada and European Central Bank’s moves last week - has now diminished from a 70 per cent probability to 55 per cent.

The US economy created 272,000 jobs in May, compared with 165,000 in April and well above the estimate of 190,000. Average hourly earnings were also higher than expected, rising 0.4 per cent in May and 4.1 per cent from a year ago, compared with estimates of 0.3 per cent and 3.9 per cent.

However, even with the job gains, the unemployment rate was higher at 4 per cent, the first time it has breached that level since January 2022.

Smith said the Federal Reserve was expected to keep the official rate unchanged on Thursday morning (NZ time). “The accompanying statement to the Federal Reserve’s decision will be closely followed by the market. Inflation is proving more resistant in the US than in other parts of the world.”

At home, ANZ merchant and card spending in May showed annual growth was 2.3 per cent, despite inflation running at a considerably higher pace.

The bank said durables, discretionary categories and clothing continued to drag on growth, as well as the impetus from tourism spending. Miscellaneous services, particularly finance, was gaining momentum.

Fisher and Paykel Healthcare was down 45c to $29.55, Ebos Group declined 99c or 2.93 per cent to $32.75; Mainfreight decreased 82c to $68.65; Mercury Energy shed 8.5c to $6.565; a2 Milk eased 13c to $7.61; Summerset Group fell 26c or 2.65 per cent to $9.54; and Port of Tauranga was down 7c to $4.88.

Tourism Holdings decreased 6c or 3.31 per cent to $1.75; Scott Technology declined 12c or 4.9 per cent to $2.33; Winton Land fell 8c or 4 per cent to $1.92; and Napier Port was down 5c or 2.01 per cent to $2.44.

In the retail sector, Briscoe Group shed 7c to $4.11; Michael Hill was down 1.5c or 3.37 per cent to 86c; and Hallenstein Glasson was up 10c or 1.89 per cent to $5.40.

In the property sector, Investore gained 2c or 1.96 per cent to $1.04, Stride added 3c or 2.48 per cent to $1.24; Vital Healthcare Trust increased 5c or 2.69 per cent to $1.91; and Argosy declined 2.5c or 2.31 per cent to $1.055.

Other decliners were Restaurant Brands falling 12c or 3.64 per cent to $3.18; Move Logistics decreasing 2c or 6.06 per cent to a low of 31c; 2 Cheap Cars shedding 2c or 2.38 per cent to 82c; Delegat Group easing 10c or 2.17 per cent to $4.50; Foley Wines giving up 3c or 3.37 per cent to 86c; and Pacific Edge down 0.005c or 4.95 per cent to 9.6c.

Sky Television increased 13c or 5.39 per cent to $2.54 after news that TVNZ’s chief digital officer Kym Niblock was moving to the pay TV and streaming broadcaster.

Seeka, up 1c to $2.46, told the market it packed 43 million class 1 kiwifruit trays this season, up 44 per cent from 29.8 million trays last year. Seeka said the impact of the Zespri shipment infested by rodents was not expected to materially impact earnings.

Meridian Energy added 13c or 2.06 per cent to $6.395; SkyCity increased 4c or 2.67 per cent to $1.54; Ventia Services was up 9c or 2.25 per cent to $4.09; Third Age Health Services improved 3c or 2.07 per cent to $1.48; and CDL Investments gained 1.5c or 2.11 per cent to 72.5c.

Being AI was down 0.003 or 3.75 per cent to 7.7c after announcing it is taking a 50 per cent shareholding in Melbourne-based Tymestack.ai Pty for A$1.5m (NZ$1.61m).

Tymestack offers an AI-driven platform that optimises the timing of retailers’ discounts, reducing gross margin losses and increases profit. Some retailers over-discount to clear stock while others under-discount or discount at the wrong times, Being AI said.