NZ share market bursts into positive territory for the year - market close

Fonterra lifted its forecast farmgate milk price for the 2023/24 season 25c to $7.50 per kgMS. Photo / Mark Mitchell

The New Zealand share market burst into positive territory for the year with a late rise, while the country’s biggest company, Fonterra, provided an encouraging trading update.

The S&P/NZX 50 Index lacked commitment for most of the day, bouncing up and down. But in the last 45 minutes of trading, the index staged a half per cent turnaround and closed at 11,496.61, up 33.12 points or 0.29 per cent.

It meant the index had made a small 0.2 per cent gain for the year to date, after starting the week 0.9 per cent behind. The day before, the New Zealand market followed Australia and rose 0.94 per cent.

There were 78 gainers and 55 decliners on the main board, with 33.66 million shares worth $110.68 million changing hands.

Matt Goodson, managing director of Salt Funds Management, said the local market gave back some of the euphoria of the day before. But there’s been a strong bounce since the end of October driven by the sharp fall in US bond yields, which are built into the New Zealand market.

“The next key step is the February corporate results and the market feeling out the state of the economy.

“The Reserve Bank is continuing its monetary tightening policy and the market is challenging this. At some point, the market will look forward to the growth prospects beyond,” Goodson said.

In the United States, labour costs fell more than analysts expected and productivity increased faster than anticipated. It reinforced the view that the US economy will have a soft landing and the Federal Reserve will cut interest rates next year.

The markets, which fell for the third day in a row (except Nasdaq Composite on one occasion), are now waiting for the latest non-farm payrolls, wages and unemployment numbers, due at the end of the week.

At home, dairy giant Fonterra lifted its forecast farmgate milk price for the 2023/24 season 25c to $7.50 per kgMS because of increasing demand for commodity products including in the Chinese market.

Fonterra’s net profit for the first quarter rose 85 per cent to $392m compared with the same period last year and operating earnings (ebit) increased 63 per cent to $575m. Full-year forecast earnings have been upgraded to 50-65c a share, up from 45-60c.

Fonterra Shareholders’ Fund was up 7c or 2.34 per cent to $3.06. Global marketer a2 Milk increased 11c or 2.57 per cent to $4.39, and Synlait was down 1c to $1.08.

In the energy sector, Contact was up 5c to $7.88; Vector increased 7c or 1.9 per cent to $3.75; Genesis gained 4c to $2.47; Meridian was down 10c or 1.89 per cent to $5.20; and Manawa declined 5c to $4.36.

In the property sector, Vital Healthcare Trust increased 6.5c or 3.15 per cent to $2.13; Argosy was up 3c or 2.8 per cent to $1.10; and Stride added 3c or 2.26 per cent to $1.36.

Fisher and Paykel Healthcare was up 28c to $23.85; Port of Tauranga collected 11c to $5.47; Vulcan Steel added 24c or 3.09 per cent to $8; NZME gained 3c or 3.45 per cent to 90c; Winton Land increased 5c or 2.08 per cent to $2.45; and Rakon rebounded 4c or 6.56 per cent to 65c.

Eroad gained 3c or 3.41 per cent to 91c; 2 Cheap Cars rose 5c or 6.1 per cent to 87c; Bremworth was up 3c or 5.26 per cent to 60c; and ArborGen increased 0.009c or 5.42 per cent to 17.5c.

Ebos Group decreased 50c to $36.90; Mainfreight was down $1.04 to $68.11; Chorus shed 10c to $7.665; Napier Port declined 13c or 5.33 per cent to $2.31; Just Life Group fell 2.5c or 7.37 per cent to 31.5; and Restaurant Brands was down 17c or 4.38 per cent to $3.71.

In the retirement village sector, Oceania Healthcare increased 3c or 4.41 per cent to 71c but Summerset Group was down 14c to $9.26; Ryman Healthcare declined 6c to $5.35; and Arvida Group shed 2c or 2.11 per cent to 93c.