“The Reserve Bank of Australia’s latest move was the key piece of news for our market. Keeping rates on hold had already been priced into the market and people wanted see the wording around the outlook and when the bank would look at cutting [rates].”
The Australian Reserve Bank kept its cash rate at a 12-year high of 4.35 per cent and said “while there are encouraging signs that inflation is moderating, the economic outlook remains uncertain. The December quarter national accounts data confirmed growth has slowed”.
“The path of interest rates that will best ensure inflation returns to the target range of 2-3 per cent in a reasonable timeframe remains uncertain and the board is not ruling anything in or out.”
There was no firm indication of timing for rate cuts, and the Reserve Bank is forecasting a return to the target inflation next year or the middle of 2026.
The S&P/ASX 200 Index had gained 0.41 per cent to 7707 points at 6pm New Zealand time.
The Bank of Japan raised short-term interest rates from minus 0.1 per cent to between 0 per cent and 0.1 per cent because of increased wages - thus ending the negative rates regime after nearly eight years and heralding the first rate rise in 17 years.
Japanese unions have clocked the largest wage increases in more than three decades.
At home, KMD Brands was down 1c or 1.92 per cent to a new all-time low of 51c - its high was $2.62 on October 1, 2013 - after reporting a net loss of $9.66m for the six months ending January. The retailer had earlier warned the market about a slump in sales.
Group revenue fell 14.5 per cent to $468.64m because of “weaker consumer sentiment, the warmest winter on record in Australia and an over-reliance on winter weight product”. Gross margin improved 10 basis points to 58.8 per cent.
Kathmandu’s sales were down 21.5 per cent to $152.3m, Rip Curl’s declining 9.2 per cent to $278.3m and Oboz’s falling 20 per cent to $38m. KMD is not paying an interim dividend.
Sullivan said KMD reiterated its earnings guidance. “There was no surprise there, but nonetheless it was a disappointing interim result.”
Other retailers Briscoe Group was down 2.5c to $4.60; Hallenstein Glasson declined 10c to $6.20; The Warehouse decreased 2c to $1.36; and Michael Hill was unchanged at 72c.
Mainfreight was up $1.19 or 1.76 per cent to $68.69; a2 Milk gained 12c or 1.89 per cent to $6.48; Auckland International Airport added 10.8c to $8.20; Freightways collected 23c or 2.73 per cent to $8.65; and Restaurant Brands increased 8c or 2.46 per cent to $3.33.
In the energy sector, Meridian was up 19.5c or 3.48 per cent to $5.795, and Contact increased 19c or 2.33 per cent to $8.36.
Heartland Group rebounded 2c or 1.71 per cent to $1.19; Scales Corp rose 14c or 4.44 per cent to $3.29; Kiwi Property was up 2c or 2.44 per cent to 84c; Vulcan Steel increased 15c or 1.79 per cent to $8.55; Steel & Tube gained 2c or 1.94 per cent to $1.05; and Synlait Milk added 2c or 2.86 per cent to 72c.
Scott Technology declined 10c or 3.33 per cent to $2.90 after telling the market its chief executive John Kippenberger is stepping down at the end of May after nearly five years in the role.
Ebos Group was down 54c to $36.53; Tourism Holdings declined 6c or 1.83 per cent to $3.22; AFT Pharmaceuticals shed 12c or 3.85 per cent to $3; Third Age Health decreased 3c or 1.79 per cent to $1.65; and Green Cross Health was down 2c or 1.85 per cent to $1.50.
Arvida Group, unchanged at $1.04, has a conditional agreement for the $30m sale of Strathallan retirement village in Timaru. The deal is likely to be completed at the end of next month.
