Market close: Has the Santa Claus rally begun? Fed chair sparks lift in stocks

Federal Reserve chair Jerome Powell indicated rate rises would be smaller in the future. Photo / AP

An obliging United States Federal Reserve chair Jerome Powell sparked further rallies, the Dow Jones Industrial Average came out of the bear market, and the New Zealand sharemarket posted another impressive gain.

On this positive day some investors were wondering whether the traditional Santa Claus rally is under way, after Powell said it was time to slow the interest rate rises.

The S&P/NZX50 Index again performed strongly in the afternoon - led by Fisher and Paykel Healthcare and Ebos - and closed at 11,654.56, up 102.51 points or 0.89 per cent following a 1.38 per cent rise the day before.

There were 93 gainers and 40 decliners over the whole market on an improved value of 38.46 million share transactions worth $168.17 million.

Powell said “it made sense to moderate the pace of our rate increases as we approach the level of restraint that will be sufficient to bring inflation down.” Commentators are now predicting a smaller 50 basis-point increase after four consecutive 75 basis-point rises from the Fed’s meeting next month.

Dan Stratful, investment adviser with Forsyth Barr, said the local market was led by the buoyant night on Wall Street on the back of positive comments from Powell.

“For the Nasdaq Composite to be up more than 4 per cent is quite a daily jump. We’ve just had our mini reporting season wrapping up and we’ve seen some fairly reasonable results. The Christmas rally as I predicted has happened,” he said.

The technology-laden Nasdaq climbed 4.41 per cent to 11,468 points but is still down 26.7 per cent this year. The S&P 500 rose 3.09 per cent to 4080.11 and is down 14.39 per cent for the year.

The Dow Jones was up 2.18 per cent to 34,589.71 points and officially stepped out of the bear market. It needed to go over 34,470.61 points and is now 6 per cent away from its January 4 record close of 36,799.65.

The S&P/ASX 200 Index was up 0.9 per cent to 7349.7 points at 6pm NZ time.

At home, Fisher and Paykel Healthcare gained a further 72 cents or 3.05 per cent to $24.32 - its highest level since late March.

Ebos Group was up 37c to $41.32 on trade worth $44m, pushed by passive investment funds that track the MSCI indices needing to stock up.

Fletcher Building gained 12c or 2.42 per cent to $5.07; Genesis Energy increased 5.5c or 2.17 per cent to $2.59; and a2 Milk added 14c or 2.11 per cent to $6.79 on the eve of sister company Synlait’s annual meeting. Investors are hoping the meeting will provide an indication of a2 Milk’s sales progress. Synlait was up 11c or 3.61 per cent to $3.16.

Retirement village operators Summerset Group was up 15c to $9.50; Ryman Healthcare gained 5c to $6.70; and Oceania Healthcare increased 3c or 3.73 per cent to 84c.

Gentrack was again lively, rising 7c or 2.94 per cent to $2.45 and has climbed more than 40 per cent in three trading days.

Air New Zealand was up 1.5c or 1.95 per cent to 78.5c on increasing business, carrying 1.25 million passengers in October compared with 340,000 for the same month last year and 1.37m in 2019. Auckland International Airport gained 9.5c to $8.135.

Fast food operator Restaurant Brands gained 4c to $6.65 after announcing executive appointments. Arif Khan, who runs the New Zealand business, becomes the global chief operating officer and will also be the acting chief executive when Russel Creedy retires at the end of March.

Julio Valdes, who works for Mexican investment company Grupo Finaccess, has been appointed as Restaurant Brands’ group chief financial officer.

Exporters Sanford increased 10c or 2.33 per cent to $4.40, and Scales Corp rose 24c or 5.48 per cent to $4.62. Argosy Property collected 2.5c or 2.15 per cent to $1.19; Vista Group added 6c or 3.95 per cent to $1.58; and Vulcan Steel was up 18c or 2.07 per cent to $8.86.

Green Cross Health gained 2.5c or 1.95 per cent to $1.31; Allied Farmers was up 3c or 4.23 per cent to 74c; Foley Wines added 6c or 4.62 per cent to $1.36; AFT Pharmaceuticals collected 7c or 1.89 per cent to $3.77; and Smartpay increased 5.5c or 5.53 per cent to $1.05.

Napier Port gave up the gain it made the day before, falling 11c or 3.82 per cent to $2.77; Mainfreight shed $1 to $70.50; Eroad was down 3c or 2.4 per cent to $1.22; T&G Global declined 5c or 2 per cent to $2.45; Pacific Edge dropped 1.5c or 3.26 per cent to 44.5c; and Vital was down 2.5c or 7.81 per cent to 29.5c.

Infratil, down 3.5c to $8.815, earlier told the market it was retaining the shareholding in RetireAustralia alongside the NZ Super Fund following a review. Infratil said the RetireAustralia business was performing strongly, with occupancy at 93.33 per cent - the highest level since 2017.

Scott Technology, up 4c to $2.69, is developing an automated connection system for stationary charging of electrified machines for Caterpillar, the world’s leading manufacturer of construction and mining equipment.