“I suppose it was a little bit split between would they go for the 50 or would they leave it till November. It’s a bird in the hand approach given what the economy sorely needs,” Smith said.
“I think the tipping point might have been the Quarterly Survey of Business Opinion from yesterday. If they weren’t there already, that probably tipped things over the edge in favour of a 50-basis-point cut.”
Just before the release in the interest rate markets, two-year swap rates fell to 2.56% from 2.63%.
Smith said the cut would be good for exporters and interest-rate-sensitive or economy-sensitive companies.
He also agreed the late rise was driven higher by yielding stocks on the property index and the consumer discretionary index, which benefit the most from OCR cuts.
Summerset Group’s share price rose 51c or 4.54% to $11.75 after 492,942 shares traded on turnover worth $5.76m.
Property for Industry also increases, up 3.15% or 8c to $2.62 on turnover worth $2.68m.
Ryman Healthcare, however, was down 2.43% to $2.81. Smith said the drop could be related to Ryman’s current suspension of dividend payments.
Meanwhile, share prices for gentailers Mercury Energy, Genesis Energy and Meridian Energy all experienced a lift.
Mercury rose 10c to $6.78, Genesis was up 4c to $2.47 and Meridian climbed 16c to $5.96.
The market’s largest inhabitant, Fisher & Paykel Healthcare, halted the positive momentum, falling 63c or 1.65% to $37.55 on turnover worth $22.67m. Smith said this was likely because of a rating downgrade from Craigs Investment Partners.
Wall Street stocks turned lower Tuesday and gold closed in on US$4000 (about $6960) per ounce as investors weighed the US Government shutdown and political turmoil in France.
Wall Street equities opened higher but stumbled into negative territory soon thereafter, with some seeing signs of a fatigued market after a heady run.
“The momentum is beginning to dry up,” said FHN Financial’s Chris Low. “It just feels to me like this is primarily profit-taking; we need another catalyst.”
All three major indices finished the day lower, with the S&P 500 down 0.4%.
In Europe, the Paris stock market edged back up after a sell-off, even as President Emmanuel Macron faced a call from his first Prime Minister, Edouard Philippe, to resign over a deepening political and budget crisis.
London and Frankfurt also ended broadly stable, but the euro fell further against the dollar.
– Additional reporting AFP
Tom Raynel is a multimedia business journalist for the Herald, covering small business, retail and tourism.
Listen and subscribe to the Today in Business podcast – the top headlines from the NZ Herald business team summarised and delivered by an AI voice as an easily digestible recap.
