New Zealand's benchmark index had a positive bounce today as investors' concern about an impending recession receded slightly.
The S&P/NZX 50 Index rose 113.3 points or 1.07% to 10,701.59. Turnover was $119 million and 40 stocks fell while 100 stocks rose.
Greg Smith, head of retail at Devon Funds, said the market had a better day today as global recession discussion had turned less negative.
He said Westpac’s consumer confidence data released today had shown that while households were under pressure, consumer households had built up savings during the pandemic and their household balances were less fragile than first thought.
Some investors in NZ’s market had also taken the opportunity to buy up “beaten up” stocks on the index today as well, Smith said.
Transport technology and vehicle telematics company Eroad had one of the biggest falls on the index today, dropping 4.6% to $1.67.
The company announced to the NZX this morning that Mark Heine had been named permanent chief executive for Eroad after nearly three months as acting CEO.
Heine, who has been with the company since 2015 and previously held the role of executive vice-president general counsel, picked up the acting CEO position following the abrupt resignation of previous chief executive Steve Newman in April.
The company’s share price had closed at $1.75 yesterday – its lowest closing price since mid-2017. So today’s share price marks another new low.
On the energy front, all energy stocks declined across the board. Meridian Energy shares were down 0.11% to $4.37 and Manawa Energy was down 0.17% to $5.99.
Meridian told the NZX this morning that it “welcomed” the High Court’s decision to dismiss the legal challenges of Manawa Energy and others to the Electricity Authority’s new Transmission Pricing Methodology (TPM) guidelines.
Manawa Energy told the NZX in a separate announcement that the company was “disappointed” but stood by its decision to seek the judicial review.
Genesis Energy was also down 1.2% to $2.57 and Contact Energy fell 2.4% to $7.24.
All banking stocks had a good day, with ANZ Bank up 2.6% to $24.25, Westpac up 2% to $21.57 and Heartland Group up 1.9% to $1.95.
Logistics and transport company Mainfreight was up 0.18% to $68.18 and Fletcher Building shares were up 3.6% to $4.84.
Smith said Fletcher Buildings had faced some “misaligned” criticism over the plasterboard shortage NZ is currently facing.
Winstone Wallboards, the Fletcher Buildings subsidiary that makes up about 95% of the plasterboard market with its Gib product, hasn’t been able to keep up with demand, which has created frustration across the building industry and beyond.
“It’s been all over the news today about how the leadership needs to be held to account over the Gib shortage but I think the reality is that it's a bit of a beat-up,” Smith said.
“They can only produce to the extent that they have the capacity for.”
Earlier today, minister for building and construction Megan Woods announced a new ministerial taskforce will look at what can be done to ease plasterboard shortages – including the potential for legislative or regulatory change.
CMC markets analyst Tina Teng said in a note this morning that crude oil prices had eased losses on Monday, following a sharp selloff last week.
She said the “recent rebound” of fuel demands in China and the increasing consumption of fuel in the summer season could “cushion the price drop” that had previously been sparked by recession fears.
“On top of the tight supply of crude, a lack of refineries is another major issue for the oil markets,” she said.
Australian transport fuels company Ampol shares were down 3.5% to $38.26 today.
ASB economist Nathaniel Keall said the bank expected dairy prices to go up after the global dairy trade auction overnight, which would signal “upside risk” to their $9.20 per kgMS milk price forecast for the 2022/23 season.
“For any central bankers looking for a career change, moving to NZ and milking cows could be a go-er,” he said.
Fonterra Shareholders' Fund shares were up 1.3% to $3.14 and A2 Milk also rose 3.3% to $4.76.
The NZ dollar was trading at 63.39 US cents at 3pm in Wellington, down from 63.27 cents yesterday. The trade-weighted index was at 71.34, from 71.21 yesterday.