F&P Healthcare helped nudge the benchmark into positive territory.
New Zealand’s S&P/NZX 50 index clawed its way into positive territory in the match period when the large investment funds tend to execute their trades, with Fisher & Paykel Healthcare buoying the benchmark.
Local tech companies were mixed with Vista Group International leading the NZX50 higher and Serko posting the biggest decline on the benchmark in a soft day across Asia.
Meanwhile, the kiwi dollar held near a seven-month low after Statistics New Zealand figures showed the unemployment rate edged up to 5.3% in September, keeping expectations firm for the Reserve Bank to cut the official cash rate at next month’s policy review.
And Heartland Group Holdings gave up some of yesterday’s gains while Turners Automotive Group advanced after the RBNZ’s latest financial stability review showed risks to the nation’s financial system remain elevated relative to recent years, while finance companies are lending more aggressively in areas where banks have shied away from.
The NZX50 increased 15.02 points, or 0.1%, to 13,620.98, with 27 stocks gaining, 20 declining and three unchanged. Turnover across the main board was $163.9 million, of which F&P Healthcare accounted for $18.4 million as it rose 2% to $37.75, helping keep the index on the green side of the ledger.
Stock markets were broadly weaker across Asia, with Japan’s Nikkei 225 index down 3.1% in late trading, while Hong Kong’s Hang Seng declined 0.3%, with tech stocks following Wall Street lower amid heightened fears about how stretched valuations have been among companies latching on to artificial intelligence. Bitcoin dipped below US$100,000, and was recently up 1.2% at US$101,896.
In New Zealand, tech stocks were mixed, with Vista Group International leading the benchmark higher as it gained 4.4% to $2.62, while travel software developer Serko posted the biggest decline on the NZX as it fell 3.5% to $2.47. Utilities software firm Gentrack increased 0.2% to $8.90, while outside the benchmark Eroad sank 5% to $1.82.
Meanwhile, Stats NZ figures showed New Zealand’s unemployment rate crept up 0.1 of a percentage point to 5.3% in the September quarter, with no jobs growth and subdued wages leaving the door open for the Reserve Bank to cut interest rates further.
“We currently expect just one more OCR cut from the RBNZ – a 25 basis point reduction in November to 2.25%, with more monetary policy support needed to push employment concertedly higher,” ASB Bank senior economist Mark Smith said in a note. “If the economic recovery fails to gain traction, the OCR could head lower this cycle.”
The labour force figures had a silver lining with an increase in hours worked, which ASB’s Smith said indicated strengthening employment demand.
Freightways, often seen as an economic bellwether, rose 1.4% to $14.30 and retailers were generally stronger as KMD Brands gained 1.8% to 28.5 cents, Briscoe Group advanced 0.7% to $5.50 and Hallenstein Glasson Holdings increased 0.5% to $10.12.
The kiwi dollar traded at 56.53 US cents at 5pm in Auckland from 56.56 cents and down from 56.94 cents yesterday, as the prospect of lower interest rates make the local currency less attractive.
That was a boon for travel and tourism stocks, with Air New Zealand up 1.7% at 61 cents on an unusually large volume of 5.8 million, while Tourism Holdings increased 1.2% to $2.54, and fruit exporter Scales Corp, which rose 0.3% to $6.
Meanwhile, a sixth straight decline in dairy prices at the latest Global Dairy Trade auction weighed on a2 Milk Co and Fonterra Shareholders Fund units, which were down 0.5% at $10.97 and 0.6% at $8.30 respectively.
Heartland Group Holdings fell 0.5% to $1.115 and Turners Automotive Group gained 1.1% to $7.55 after the Reserve Bank’s latest financial stability report showed risks to the broader financial system remain elevated, primarily from global uncertainty and the soft domestic economy. The six-monthly report noted finance companies continued to grow lending in areas where banks are reluctant to operate.
SkyCity Entertainment Group was the most heavily traded stock on the day with a volume of 8.5 million shares as it rose 0.7% to 74 cents.
Chorus rose 0.6% to $9.53 after holding its annual meeting , with chief executive Mark Aue saying the broadband network operator doesn’t expect the economic recovery to really start beginning until early next year.
NZX increased 0.3% to $1.55 after its latest operating metrics showed trading growth continued to slow in October, while its Smart funds management arm’s pace of expansion remained at a decent clip.
Outside the benchmark, Santana Minerals climbed 2.9% to 89 cents after securing at 30-year mining permit for its proposed Central Otago site, while gold futures were up 0.2% at US$3,970 an ounce at 5pm.
And the Carbon Fund dropped 4.4% to $1.31, its lowest level since May last year, after the government announced a series of tweaks to the emissions trading scheme.
Reporting by Paul McBeth.
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