The New Zealand sharemarket bounced back with a gain of more than half a per cent, helped by a recovery in Fletcher Building and a sharp rise from utilities investor Infratil.

The S&P/NZX 50 Index
traded strongly in the afternoon and closed at 11,724.48, up 84.44 points or 0.73 per cent. The index finished the week shedding nearly 1.2 per cent.

There were 85 gainers and 51 decliners over the whole market on volumes of 26.85 million share transactions worth $109.73 million.

Shane Solly, portfolio manager with Harbour Asset Management, said there was another twist from the Reserve Bank with its refocus on fighting core inflation.

“The market is quite choppy at the moment and some of the price movements are quite extreme. But there was some positive news from Infratil and Meridian,” he said.

“We have a massive week coming up with 19 companies reporting their financial results. The market has curbed its enthusiasm for early interest rate cuts – they’ve been pushed back from the third to fourth quarter this year – and now it’s back to the earnings performances, with companies having to show us the money.”

Reserve Bank governor Adrian Orr told a Waikato University economics conference there is still work to do to truly anchor inflation expectations, with the last yards possibly being the most difficult.

“While declines in core inflation are moving us in the right direction, tackling the tail end of these persistent pressures in the domestic economy remains key to achieving 2 per cent inflation,” Orr said.

Meridian Energy, the largest local stock on market capitalisation, was up 12c or 2.14 per cent to $5.72 after reporting an 8.3 per cent rise in retail sales volumes in January compared with the same month last year. Small-medium business sales were up 7 per cent, large business 11.1 per cent and agriculture 19.2 per cent.

Meridian said national hydro storage increased from 84 per cent to 101 per cent of the historical average for the month ending February 14.

Infratil, which has a 7.5 per cent weighting on the NZX index, rose 29c or 2.84 per cent to $10.49. Solly said Infratil’s peers overseas have come out with strong profit outcomes, particularly involving data centres.

Fletcher Building rebounded 17c or 5.07 per cent to $3.52. Solly said: “The train smash that is Fletcher was heavily sold in the close the day before. People have had time to digest the numbers and we saw a bounce-back in the share price.

“The Fletcher management has been doing the rounds and talking to investors. Fletcher still has significant liabilities that are hard to quantify and the market will still remain wary,” he said.

Air New Zealand, which reports on Thursday, was down 0.005c to 64c with one broker expecting a first-half “material fall” in earnings. Management guidance for gross profit is at the bottom end of $180m-$230m.

The same broker expects Scales Corp, up 7c or 2.26 per cent to $3.13, to report gross profit at the top end of the apple exporter’s guidance of $14m-$19m.

Air New Zealand is likely to fall out of the FTSE All World Index. And Chorus, Heartland Group and Synlait Milk are expected to be removed from the FTSE Small Cap Index following the March review.

Ebos Group, reporting on Wednesday, gained 62c to $37.36; Spark collected 5.5c to $5.19; Vector added 8c or 2.13 per cent to $3.84; PGG Wrightson rose 19c or 6.31 per cent to $3.20; Napier Port was up 6c or 2.47 per cent to $2.49; and Restaurant Brands added 10c or 2.9 per cent to $3.55.

Retailers Hallenstein Glasson gained 8c to $5.59; KMD Brands was up 2c or 3.28 per cent to 63c; The Warehouse rebounded 3c or 2.24 per cent to $1.37; and Michael Hill was down 3c or 3.53 per cent to 82c.

Vital Healthcare Property Trust increased 4c or 1.88 per cent to $2.17; Vulcan Steel gained 16c or 2.08 per cent to $7.86; and My Food Bag collected 0.007c or 4.96 per cent to 14.8c.

Skellerup was down 7c to $4.42; Port of Tauranga declined 10c or 1.83 per cent to $5.35; NZ Rural Land fell 3c or 3.19 per cent to 91c; Green Cross Health decreased 3c or 2.36 per cent to $1.24; and 2 Cheap Cars was down 2c or 2.33 per cent to 84c.

AFT Pharmaceuticals declined 8c or 2.19 per cent to $3.57 after upgrading its full-year operating profit to $23m-$25m, from the previous guidance of $22m-$24m. The upgrade will include its share of the US$6m ($9.84m) licence fee for Hikma Pharmaceuticals’ Maxigesic intravenous pain relief sales in the United States.