The Reserve Bank cut the OCR today by 25 basis points to 3%, in line with market expectations.
The Kiwi dollar fell after the decision, while in the interest rate markets, the two-year swap rate fell by 15 basis points to 2.97% and 10-year bond yields dropped by nine basis points to 4.41%.
Hamilton Hindin Greene investment adviser Jeremy Sullivan said the market was buoyed by the Reserve Bank’s decision.
“It’s primarily the oath for future cuts to 2.5% by the year’s end, the market is pretty happy with it,” Sullivan said.
“Members within the committee who see it justified to cut further heavily lean on the next one, giving more credence for 50 more basis points to come off this year.”
The results season continued with full-year results from Spark and Fletcher Building.
Spark chairwoman Justine Smyth said the last year was “one of the most challenging periods in Spark’s history“ as its full-year reported net profit fell 17.7% to $260m.
The telco’s revenue dropped 2.5% to $3.75 billion, and its total capital expenditure was down 17.2% to $429m.
Sullivan echoed those sentiments, calling it a “challenging year” for the business.
“It had a lower customer spend, although it did deliver on its guidance maintained ahead of earnings. I would say that a cut in the dividend is expected.”
Spark’s share price rallied 3.63% or 9c to $2.57 after 6.6 million shares changed hands, the highest volume of the day, with turnover worth $16.9m.
Elsewhere, Fletcher Building released its full-year results, putting a net loss of $419m down to tough market conditions.
“The main message is another tough year after several tough years,” said Sullivan.
“A wee shining light was that the convention centre is on track for handover in 2025. Although the lack of colour on the sale of the construction business was a bit disappointing.”
Revenue for the business fell 9% to $7b, but a highlight was its net debt of $999m, an improvement from $1.77b last June.
Fletcher’s share price rose 0.33% or 1c to $3.08 with 1.3 million shares changing hands on turnover worth $4.1m.
Other big movers on Wednesday included Fisher & Paykel Healthcare, with its share price lifting 70c to $37.65 on turnover worth $16.2m.
Meanwhile, Mainfreight’s share price fell 60c or 1.01% to $59 on turnover worth $21.6m.
Wall Street’s stocks finished mostly lower on Tuesday, dragged down by tech companies retreating from record highs, while a Home Depot earnings report lifted retailers.
The broad-based S&P 500 Index fell 0.6% to 6411.37, while the tech-focused Nasdaq Composite Index fell 1.5% to 21,314.95.
The Dow Jones Industrial Average rose a marginal 10.5 points to 44,922.27, pulling back after hitting a record high on the back of Home Depot’s quarterly report.
Shares of the home improvement company rose 3.2% after slightly missing analyst expectations but maintaining its full-year forecast.
Target, Walmart and Lowe’s reports are due later in the week with all eyes on potential impacts on consumers from US President Donald Trump’s tariffs.
– Additional reporting AFP
Tom Raynel is a multimedia business journalist for the Herald, covering small business, retail and tourism.
