Market close: Leading stocks rebound as markets hit calmer waters

Photo / NZME

Leading stocks rebounded and pushed the New Zealand sharemarket to a significant gain while overseas shares hit calmer waters – thanks to Bank of England intervention.

After a strong day on Wall Street, the S&P/NZX 50 Index rose early and stayed there until a late dip, finishing 80.47 points or 0.72 per cent ahead at 11,200.04. The index reached an intraday high of 11,286.39 points.

There were 88 gainers and 50 decliners over the whole market but trading was again light with 35.13 million shares worth $109.03 million changing hands.

With the British pound hitting an all-time low against the US dollar and the UK government debt market in turmoil, the Bank of England took emergency action with a NZ$123.6 billion bond-buying programme over the next fortnight.

Matt Goodson, managing director of Salt Funds Management, said the bank was supposed to be tightening its monetary policy and instead is forced to carry out more quantitative easing, particularly to protect UK pension funds.

He said the funds entered into large derivative agreements called LDIs (liability driven investment) to remove their exposure to the movements in bond yields.

"But the funds were running out of collateral to pay for the margin calls and the Bank of England received panic calls. The action by the bank was counter-intuitive, but the sharemarket response was positive with a cautious tone," Goodson said.

On Wall Street, the Dow Jones Industrial Average was up 1.88 per cent to 29,683.74 points; S&P 500 increased 1.97 per cent to 3719.04; and Nasdaq Composite rose 2.05 per cent to 11,051.64.

Across the Tasman, the S&P/ASX 200 Index had risen 1.85 per cent to 6581.5 points at 6pm NZ time.

At home, business confidence has lifted slightly, according to ANZ Research. Its September survey showed confidence lifted 11 points to minus 37, and expected own activity increased 2 points to minus 2.

"Inflation pressures remain intense and are easing only very slowly," said ANZ senior economist Miles Workman.

Leading stocks that had been knocked around over the previous two down days recovered lost ground. Fisher and Paykel Healthcare was up 30c to $19.20; Spark rose 13.5c or 2.72 per cent to $5.105; Ebos Group increased $1.04 or 2.75 per cent to $38.84; Mainfreight collected $1.20 to $68.90; and Auckland International Airport gained 7c to $7.49.

Chorus gained 8.5c to $7.545; a2 Milk improved 6c to $6.16; Ryman Healthcare was up 8c to $8.60; SkyCity Entertainment increased 9c or 3.37 per cent to $2.76; and Serko rose 11c or 3.56 per cent to $3.20.

In the energy sector, Mercury gained 11c or 1.97 per cent to $5.70; Genesis was up 4c to $2.69; Manawa increased 14c or 2.5 per cent to $5.75; Contact was down 20c or 2.58 per cent to $7.55; Meridian declined 9c or 1.82 per cent to $4.85; and Vector decreased 9c or 2.12 per cent to $4.15.

The property sector which had fallen 6.8 per cent in two days was again mixed. Precinct increased 1.5c to $1.27; Vital Healthcare Trust was up 4.5c or 1.85 per cent to $2.475; and Stride was down 5c or 3.07 per cent to $1.58.

Tourism Holdings increased 8c or 2.94 per cent to $2.80 after the Australian Competition and Consumer Commission approved the merger with Apollo Tourism & Leisure, saying the sale of Apollo assets to Jucy was an acceptable remedy to competition concerns. The merger is expected to be completed by the end of the year.

Other gainers were KMD Brands, up 3c or 2.94 per cent to $1.05; Pushpay increasing 3c or 2.8 per cent to $1.10; South Port NZ adding 16c or 1.88 per cent to $8.65; Pacific Edge rising 4c or 8.89 per cent to 49c; My Food Bag up 4c or 6.67 per cent to 64c; and PaySauce improving 2.5c or 9.09 per cent to 30c.

Utilities software firm Gentrack, rising 12c or 8.96 per cent to $1.46, upgraded its full-year revenue forecast to around $125m, from $115m, and operating earnings (ebitda) to mid to high single digits.

Freightways was down 10c to $9.85; Infratil decreased 10.5c to $8.815; Colonial Motor Company fell 18c or 1.84 per cent to $9.60; Ventia Services declined 10c or 3.238 per cent to $2.86; and Restaurant Brands was down 20c or 2.67 per cent to $7.50.

The Warehouse declined 6c or 1.86 per cent to $3.17; Hallenstein Glasson was down 6c to $4.99; Foley Wines decreased 3c or 2 per cent to $1.47; Fonterra Shareholders' Fund lost 10c or 3.14 per cent to $3.08; and Plexure Group was down 2c or 5.88 per cent to 32c.

Air New Zealand's $50m fixed rate bonds mature on October 28 and it is considering making a new offer of five and a half years to investors. Air NZ's share price edged ahead 0.005c to 71c.

Enprise Group, up 1c to 99c, has been granted a waiver to its banking interest cover by BNZ till the end of June next year.