Market close: NZ shares post solid gain

A strong corporate reporting season in the United States has fuelled renewed confidence for the New Zealand sharemarket as it posted another solid gain.

For the second day running, the S&P/NZX 50 Index had a strong afternoon of trading and closed at 13,114.24, up 48.32 points or 0.37 per cent.

Volumes were steady with 54.79 million shares worth $151.49 million changing hands, and there were 81 gainers and 44 decliners over the whole market, soon to be boosted by two new listings – medicinal cannabis firm Greenfern Industries and Vulcan Steel.

The leading US indices – falling 5 per cent in September – are again nearing their record highs, with the Dow Jones Industrial Average increasing 0.56 per cent to 35,457.31points overnight, S&P 500 rising 0.74 per cent to 4519.63, and Nasdaq Composite gaining 0.71 per cent to 15,129.09.

Across the Tasman, the S&P/ASX 200 Index was up 0.67 per cent to 7424.50 points at 5.45pm NZ time.

The NZ dollar continues to strengthen, trading at US71.76c against the American greenback and A95.7c against the Australian at 5.45pm NZ time. Wholesale interest rates are also on the move – with the five-year swap rate rising to 2.31 per cent, from 1.87 per cent 10 days ago. Crude oil prices are also high at US$81.96 ($114.19) a barrel.

Dan Stratful, investment adviser with Forsyth Barr, said the latest quarterly earnings from the leading US companies have met or beaten expectations. “You are seeing a rebound on Wall Street and this is flowing through to Australia and New Zealand.

“As well, we have had two key (positive) trading updates from Fletcher Building and Ebos Group. The interesting thing is that dips in the market continue to be eagerly bought, and this will keep repeating.

“There seems to be underlying support for the market, and whether we have an end-of-year rally remains to be seen. But if the US reporting season holds up well, then perhaps we will,” Stratful said.

Dairy nutrition company a2 Milk had another strong day, rising 45c or 6.22 per cent to $7.68 on trade worth $21.19m. Synlait Milk was up 8c or 2.14 per cent to $3.82.

Stratful said two competitors, Danone and Bubs Australia, have now commented that the daigou sales channel has improved and demand is picking up in China. This may herald a long-awaited turnaround for a2 Milk.

Market leader Fisher and Paykel Healthcare was up another 33c to $30.90; Contact Energy increased 11c to $8.13; Auckland International Airport gained 6c to $7.85; and Ebos Group rose 32c to $35.30, after reporting a 10 per cent increase in revenue and earnings for the September quarter.

Vista Group, supplying cinema management software, climbed 10c or 4.17 per cent to $2.50; SkyCity Entertainment collected 7c or 2.22 per cent to $3.23; strong performer DGL Group rose 18c or 5.77 per cent to $3.30; T&G Global was up 9c or 3.1 per cent to $2.99; and Solution Dynamics increased 7c or 2.43 per cent to $2.95.

Mainfreight was down $2.44 or 2.68 per cent to $88.70 on profit-taking; Chorus declined 6.5c to $6.40; Port of Tauranga decreased 7c to $6.70; Napier Port shed 5c to $3.10; and Harmoney fell 6c or 2.96 per cent to $1.97.

Manuka honey producer Comvita was up 5c to $3.78 after re-affirming its full-year operating earnings (Ebitda) forecast of $27m-$30m at its annual meeting. Digital sales would make up 38 per cent of revenue and inventory will be reduced from $100m to $90m. First quarter revenue was up 4.5 per cent and Ebitda increased 10.6 per cent compared with the previous corresponding period.

Genesis Energy told the market it has offered its 280,000 customers five hours free power and suspended late payment fees for those under alert level 2 and above. Total customer demand was down 6 per cent because of the Covid lockdown and warmer winter conditions. Genesis’ share price was down 3c to $3.30.

In its September quarter report, Meridian said New Zealand generation increased 11.3 per cent compared with the same period last year, customer numbers were up 8 per cent, and retail sales volumes rose 11.6 per cent. Meridian’s share price was unchanged at $4.87. Trustpower was up 11c to $7.39, and Mercury down 6c to $6.09.

TruScreen Group rose 2.5c or 39.06 per cent to 8.9c after providing a series of updates. A study conducted in China with 458 women showed TruScreen’s cervical cancer screening technology was an effective alternative to cervical cytology, and the upgraded device is now being marketed in China.

Transport technology firm EROAD was down 11c or 1.96 per cent to $5.51 after earlier telling the market it has to wait for a statement of issues from the Commerce Commission before making any further move to buy Coretex New Zealand.

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