22 Jan 2014

Sharemarket makes gains

8:03 pm on 22 January 2014

The New Zealand sharemarket had another positive day, the benchmark Top 50 Index gaining 29 points to 4950.

Devon Funds Management analyst Phill Anderson says the New Zealand market's performance contrasts with largely flat global stock markets and a weaker Australian market.

He says it's been another strong day for tech stocks in New Zealand which has been an ongoing theme.

Mr Anderson says there were a few jitters around financial institutions in China on Wednesday morning with speculation about how that may flow through to demand for resources.

He says that accounts for the flat global and Australian markets and but New Zealand market performed quite well because it is not a country with major resources.

Mr Anderson says the market has taken it as a positive that Telecom won the auction for the final block of the 700 megahertz radio spectrum but that the phone company paid a very high price at $83 million.

Telecom shares rose 1 cent to $2.39.5.

Among the tech stocks, Xero jumped 81 cents to $43.19 and Wynyard rose to a fresh record at $3.30 before closing at $3.17, up 22 cents.

OceanaGold rose 15 cents to $2.11 after reporting record December quarter production at a lower than forecast cash cost.

Energy Mad shares doubled to 64 cents before easing to close at 60 cents after it said it has begun selling its efficient lightbulbs through Amazon.

NZ dollar weakens

The New Zealand dollar was weaker against the currencies of all our major trading partners after stronger than expected Australian inflation data.

The data, which showed annual underlying inflation at 2.6%, was the highest since 2011 and near the top of the Reserve Bank of Australia's long-term target of 2% - 3%.

ANZ senior foreign exchange strategist Sam Tuck says the data makes an Australian interest rate cut unlikely.

He says the strength in the Australian consumer price index (CPI) has caused optimism about the Australian dollar generally, reversing some of the optimism about the New Zealand dollar after New Zealand's strong CPI on Tuesday.

Mr Tuck says this has lead to markets selling the New Zealand over the Australian dollar which they had positioned on Australian dollar weakness up until now.

About 5pm on Wednesday, the Kiwi was trading at 83.16 US cents, down from 83.22 cents at that time on Tuesday, and at 93.78 Australian cents, down from 94.37 cents.

It was also trading at 50.45 British pence, 0.6131 euro and 86.52 yen.