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NZ sharemarket reverses weak start to close higher

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, July 29 NZPA - The New Zealand sharemarket rallied from a weak start on a day in which investors watched the currency plunge and the official cash rate rise.

When announcing the official cash rate was being lifted 25 basis points to 3 percent, Reserve Bank Governor Alan Bollard said the outlook for economic growth had softened. But brokers said the weaker currency was positive for exporters.

Investors also welcomed news Ryman Healthcare is expanding in Australia and waited for Telecom to execute its exit from Australia.

The benchmark NZX-50 index rose 10.835 points, or 0.359 percent, to 3033.016. Turnover was worth $87.3 million. There were 39 rises and 34 falls among the 110 stocks traded.

"The rise in interest rates was as expected," said Grant Williamson, director of Hamilton, Hindin, Greene. While the weaker currency helped companies like Fisher & Paykel Healthcare, which rose 6c to 302 and Sanford, which rose 3c to 403.

Ryman Healthcare was unchanged at 204 after telling shareholders at its annual meeting it wanted to expand into Australia.

"They are a highly successful company with excellent management so investors are happy they are trying to expand elsewhere," Mr Williamson said.

Telecom rose 3c to 199 after reiterating it is considering options for its AAPT business in Australia amid speculation it is finding it hard to sell the entire business.

"It has been a disaster of investment for Telecom and a lot of shareholder wealth has been destroyed," Mr Williamson said.

Pike River Coal fell a cent to 99. The company is making progress toward hydro-mining at its mine but investors were not too excited about its quarterly report today.

NZOG eased a cent to 123 after its quarterly report today.

Mainfreight rose 6c to 655 after telling shareholders at its annual meeting its first quarter earnings will be higher.

Auckland Airport rose 2c to 198, SkyCity rose 3c to 304 and SkyTV rose 1c to 480.

Fletcher Building fell 6c to 762, NZ Refining fell 5c to 302, Guinness Peat Group fell 1c to 65 and Tourism Holdings fell 1c to 75. The Warehouse fell 4c to 351 and Hellaby fell 2c to 184.

In the United States, stocks fell after weak durable goods figures and a downbeat assessment of the economy from the Federal Reserve's Beige Book kept the benchmark S&P 500 trapped below its 200-day moving average.

The Dow Jones industrial average dropped 0.4 percent to 10,497.88, the Standard & Poor's 500 Index dropped 0.7 percent to 1106.12, and the Nasdaq Composite Index dropped 1 percent to 2264.56.

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