11 Mar 2014

Sharemarket drops after rising streak

9:51 am on 11 March 2014

The New Zealand sharemarket has broken a six-day rising streak, with the NZX Top 50 Index falling 8 points to 5118.

Forsyth Barr investment advisor Damian Kearns said disappointing Chinese trade data had hurt the Australian stock market and helped drag the New Zealand market lower, too.

Shares in Wellington Drive Technologies fell 5c to 13c after it announced it would be raising $5 million of mandatory convertible notes to shareholders to help fund growth.

The Warehouse also dropped 17c to $3.27 but Wynyard rose 2c to $2.88 after it announced it had signed a three-year deal with the New Zealand Stock Exchange for its investigative case management solution.

"This is not surprising as Wynyard Group has other contracts with other stock exchanges internationally," Mr Kearns said.

Dollar stronger

The New Zealand dollar is slightly stronger against the currencies of all our major trading partners but down from Friday's six-year high against the yen.

Bancorp Treasury Services senior client adviser Peter Cavanaugh said investors were focussing on the Reserve Bank's decision on interest rates, which is due on Thursday.

"We, like everyone else, suffered ... after stronger-than-expected US jobs and unemployment data saw a bit of a rush on the US dollar, so everybody weakened against the US dollar," Mr Cavanaugh said.

"But we've regained ground, more so against the likes of the Australian dollar, because the markets are looking towards Thursday morning's announcement from the Reserve Bank of New Zealand governor that, as everybody is expecting, he's going to raise the Official Cash Rate (OCR)."

Most economists expected Reserve Bank governor Graeme Wheeler would raise the OCR from 2.5 percent to 2.75 percent but some people are betting on a rise to 3 percent, he said.

"The question on everybody's lips is, really, how much rather than if."

Just after 5pm, the New Zealand dollar was buying: 84.59 US cents, 93.51 Australian cents, 50.55 pence, 0.6091 euro and 87.19 yen. Friday's six-year high was 87.57 yen.