New Zealand stocks put on a modest gain after a stronger performance on Wall Street as investors worldwide became more relaxed about the prospects of rate hikes from the US Federal Reserve.
The S&P/NZX50 Index ended 35.44 points, or 0.28 per cent, higher at 12,534.8, on light volume.
US stocks had been under pressure since last week’s communication from the Fed, which was seen as paving the way for sooner-than-predicted interest rate hikes.
The Fed’s projections showed interest rates would increase in 2023.
But US stocks started the week with their biggest rally in over a month as investors came around to the idea that any tightening would be at a gradual pace.
Wall Street’s strong finish filtered through to other markets, including Australia’s, but the reaction locally was muted.
“Our market was a fraction firmer,” Grant Williamson, investment adviser at Hamilton Hindin Greene, said.
“It was similar to Monday’s trade when Wall street had lost a bit of ground and we didn’t.
“We seem to be pretty resilient at the moment to any downward moves but unfortunately we are not picking up much upside when those overseas markets are strong,” Williamson said.
“We just don’t seem to have the same volatility as those overseas markets.”
Respiratory products maker Fisher and Paykel Healthcare continued to recover from its post-result sell off, the stock gaining 59c or 1.9 per cent to $31.58.
Williamson said FPH was benefiting from the ongoing impact of a product recall by one of its competitors, Philips, of breathing devices and ventilators after it found possible health risks linked to the polyester-based polyurethane foam used in those products.
FPH also topped the turnover list with stock worth $27m changing hands.
Express package company Freightways continued to perform strongly, the stock hitting a record high and closing at $12.40, up 10c.
Retirement village company Arvida also hit a record, up 8c at $2.04.
Williamson said Arvida stock looked to be benefiting from a number of price target upgrades from analysts.
One of the biggest downward moves of the day came from Trustpower, after Monday’s big deal to sell its retail assets to Mercury for $441m, the stock falling 34c or 4.3 per cent to $7.62.
“It’s difficult to know why,” Williamson said. “Maybe there is a little bit of uncertainty that the company is going to switch to being a pure power generating company,” he said.
“Obviously it will have cash in the bank to expand its generation assets but there is probably a bit of uncertainty,” he said.
“I don’t know if the market was 100 per cent happy with the price that was paid, although seemed like a good price on a per-connection basis,” he said.
Mercury NZ finished 13c higher at $6.53. In its assessment of the deal, ratings agency S&P Global said Mercury had sufficient “headroom” to undertake the proposed acquisition.
Retirement village company Ryman ended with a six cent gain at $13.06 but was well off its session high of $13.20.
Williamson said the other retirement village companies were getting the benefit of investors switching from Ryman into the other retirement stocks.
“There could be a bit of a change in the guard,” he said.
One of the clear beneficiaries was Summerset, which gained 10c to $13.35.
Shares in Property For Industry (PFI) dropped a cent to $2.85, despite the company announcing that it expected an increase from independent valuations in the value of its property portfolio for the six months to June of about $240m or 14 per cent.
PFI said that more than a year on from the onset of Covid-19, industrial property had emerged as a resilient property sector.
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