NZ stocks claw back lost ground to end firm – Market close

Ebos shares rallied in advance of the company's inclusion on the S&P/ASX200 on Monday. Photo / 123RF

A rally in medical supplies distributor Ebos, and gains in a handful of other market leaders, helped the sharemarket claw back all the ground lost after this week’s poor growth data on heavy turnover.

The S&P/NZX 50 Index ended 13,231.66, up 111.63 points or 0.85%, with 131 million shares, worth $643.6 million, trading.

There were 81 rises and 57 falls on the main board.

The benchmark index dropped by 0.8% on Thursday after data showed New Zealand’s gross domestic product fell by a worse-than-expected 0.9% in the June quarter.

Harbour Asset Management portfolio manager Shane Solly said this week’s rate cut from the US Federal Reserve, plus the prospects of a more aggressive easing stance from the Reserve Bank of New Zealand, made for a better backdrop for equities.

Markets are starting to price in a bigger-than-expected 50 basis point cut in the Reserve Bank’s Official Cash Rate, which would be a boon for equities.

“The market has priced in a faster cutting in rates in New Zealand and landing at a lower level than it previously did, so we are seeing that feed through to more positive expectations on the New Zealand market,” Solly said.

Ebos gained $1.24 or 4.3% to end at $29.86 in anticipation of the stock entering the influential S&P/ASX200 Index on Monday.

The market was also supported by gains in other big cap stocks Infratil, up 18c at $12.34; Fisher and Paykel Healthcare, up 84c at $38.32; Auckland Airport, up 15c at $7.85; and Mainfreight, up $1.57 or 2.5% at $64.18.

Freightways – one of the few companies to report strong earnings in the last reporting season – gained 59c or 4.6% to $13.39.

Solly said trading on the day was “messy” on reports of various stocks entering and leaving the FTSE and S&P indices.

Channel Infrastucture – whose market cap now exceeds $1 billion – gained 4c to $2.48.

On the downside, Sky TV fell 16c to $3.10 and Restaurant Brands dropped 11c to $2.83.

Mercury NZ, which held its annual meeting today, fell by 16c or 2.4% to $6.49.

Port of Tauranga dropped 11c to $7.19.

The company – which operates New Zealand’s biggest port – today requested that its Stella Passage development resource consent application be referred by Minister for Infrastructure Todd McLay to the fast-track consenting process.

Steel and Tube’s share price continued to struggle, losing 3.4c to 65.5c.

The steel distributor, with its high exposure to a weak economy, reported a $23.37m loss last month and a 20% decline in sales revenue to $385.4m.

But Solly said the magnitude of the day’s downs was much lower than the magnitude of the increases.

Looking ahead, investors have high hopes for Fonterra, which reports its annual result on Thursday.

In its latest guidance, Fonterra lifted the 2024/25 season forecast farmgate milk price from $10.00 per kgMS to $10.15 per kgMS.

The co-op is forecasting earnings of 65-75 cents per share.

Fonterra is in the throes of selling its consumer and associated businesses to France’s Lactalis for $4.22b.

The sale is expected to provide a $2 per share capital return to Fonterra shareholders.

Jamie Gray is an Auckland-based journalist, covering the financial markets and the primary sector. He joined the Herald in 2011.