Market close: Investors cautious ahead of key inflation data

Serko co-founder and chief executive Darrin Grafton at his company's Parnell HQ. Serko climbed 18c or 8.7 per cent to $2.25 after upgrading its revenue guidance. Photo / Dean Purcell

Heavyweight Fisher and Paykel Healthcare lost some ground and the New Zealand sharemarket traded cautiously on low volumes as it awaited this week’s key inflation data.

The S&P/NZX 50 Index weakened throughout the day, but there was a late rise in the last hour and the index closed at 11,948.72, down 28.76 points or 0.24 per cent after reaching an intraday low of 11,905.84.

There were 64 gainers and 65 decliners on the main board with 22.29 million shares worth $61.91 million changing hands.

Jeremy Sullivan, investment adviser with Hamilton Hindin Greene, said Fisher and Paykel Healthcare – down 91.c or 3.47 per cent to $25.34 – led the market lower, giving back part of its recent gains.

Fisher and Paykel has had a strong run since just before Christmas, rising from $21.70 on December 20.

Investors sat on the sideline, and Sullivan said all eyes were on Wednesday’s release of the December consumer price indices in New Zealand and Australia.

Sullivan said locally there was a divergence of expectation among economists on the latest inflation rate. “There are opposing forces at play. We have seen falls in oil and credit card spending but increases in salaries and food prices.

“There is still a likelihood that the Reserve Bank will raise the official cash rate (OCR) another 75 basis points, but if annual inflation is softer then we may see 50 basis points,” said Sullivan.

The Reserve Bank, which meets on February 22, had predicted inflation to reach 7.5 per cent, up from the present 7.2 per cent, and the OCR to rise to 5.5 per cent by mid-year from 4.25 per cent.

Sullivan said he was cautiously optimistic for the sharemarket this year. “Swap rates have come back over the last four weeks and value is appearing in the blue-chip stocks which have made a good start to the year.

“The tech stocks in the US have also been strong and investors are believing the companies can maintain margins after cutting staff. It does appear we are seeing some light at the end of the tunnel,” he said.

The recent survey of economists by Consensus Economics showed the Eurozone will avoid a recession this year and produce growth of 0.1 per cent, underpinned by lower energy prices, government support and the earlier-then-expected China reopening which is set to boost global demand.

At home, online travel provider and tech stock Serko climbed 18c or 8.7 per cent to $2.25 after upgrading its revenue guidance for the year ending March to $42m-$47m. This represented an increase of 123 per cent to 149 per cent on the previous year’s income of $18.9m.

Serko told the market it experienced better-than-expected trading over the traditional low season from late December to mid-January and this has provided greater certainty over full-year revenue.

Serko’s share price has steadily fallen from a peak of $8.32 achieved in early September 2021.

Ebos Group increased 84c or 1.87 per cent to $45.72; Vulcan Steel was up 21c or 2.18 per cent to $9.85; Seeka continued its good run rising 8c or 2.23 per cent to $3.67; Scott Technology gained 8c or 2.91 per cent to $2.83; and Chorus added 9c to $8.35.

Retirement village operators Ryman Healthcare was up 10c to $5.77; Summerset Group increased 10c to $9.70 and Oceania Healthcare gained 1c to 83c.

Winton Land climbed 14c or 8.09 per cent to $1.87; Smartpay Holdings was up a further 6c or 4.48 per cent to $1.40; Comvita gained 7c or 2.07 per cent to $3.45; and Turners Automotive increased 5c to $3.19.

Savor gained another 2c or 4.55 per cent to 46c; MHM Automation increased 3c or 3.53 per cent to 50c; and ikeGPS added 2c or 2.17 per cent to 94c.

Energy stocks Meridian was down 8.5c to $5.275, and Contact was up 4c to $7.89. Infratil gained 7c to $8.82.

In the property sector, Stride fell 4c or 2.78 per cent to $1.40; Argosy was down 2c to $1.17; Investore declined 2c to $1.50; Kiwi Property decreased 1.5c to 92; but Property for Industry was up 1.5c to $2.265; and Vital Healthcare Trust gained 2c to $2.41.

Mainfreight was down 35c to $70.65; Port of Tauranga dipped 7c to $6.62; My Food Bag decreased 1.5c or 3.75 per cent to 38.5c; PGG Wrightson shed 9c or 2.01 per cent to $4.39; Heartland Group declined 3c to $1.81; and Third Age Health fell 6c or 3.73 per cent to $1.55.

Leading meat processor Silver Fern Farms, an existing customer, is switching to TradeWindow’s new Cube global trade software platform. TradeWindow’s share price was unchanged at 43c.