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ANZ Research said the bank clearly acknowledged the weakness in recent economic indicators and the risks of tight monetary policy to domestic demand. This assessment is inclined to lower the OCR for the first time in November rather than February.
“But the data will be decisive,” ANZ said. “Next week’s CPI data will always be more important for the outlook for the OCR than today’s announcement from the Reserve Bank.”
Jeremy Sullivan, investment adviser at Hamilton Hinding Green, said the Reserve Bank was steadfast in its fight against inflation and was winning faster than expected.
He said markets were already pricing in two rate cuts by the end of the year.
“The Reserve Bank has its foot on the economy’s throat and now it’s time to take a breath. Bonds, stock markets and currencies all reacted to today’s announcement.
“Investors will be happy to see light at the end of the tunnel (lower interest rates) and the Reserve Bank being able to change its view of the world based on the data.”
New Zealand’s 10-year government bond yield fell 4.8 basis points to 4.599%, while the two-year swap fell 460 basis points.
The New Zealand dollar weakened against both the U.S. and Australian dollars, falling to 60.88 U.S. cents from an intraday high of 61.33 cents, and against the Australian dollar it was trading at A$90.1, compared with A$90.9 earlier in the day.
Heavyweight stocks Fisher and Paykel Healthcare and Mainfreight, both global stocks, rose $1.15 (3.82%) to $31.25 and $2 (2.86%) to $72 respectively, helped by a weaker New Zealand dollar.
Contact Energy shares fell 33 cents, or 3.77 per cent, to $8.43 after it issued an update earlier this week saying it would suspend dividends from the middle of next year due to planned development and capital expenditure.
Mercury Energy rose 8 cents to $6.72, Freightways gained 14 cents, or 1.82 percent, to $7.83, Auckland International Airport gained 7 cents, or 4.48 percent, to $7.71, Skellerup gained 18 cents, or 4.48 percent, to $4.20 and Chorus gained 10.5 cents, or 10.5 cents, to $7.815.
Retirement village operators Summerset Group and Ryman Healthcare, which stand to benefit from lower interest rates, rose 20 cents, or 2.13 per cent, to $9.60 and 9 cents, or 2.54 per cent, to $3.64 respectively. Arvida Group rose 2 cents, or 2.22 per cent, to 92 cents, while Oceania Healthcare fell 1 cent, or 1.89 per cent, to 52 cents.
ANZ Bank rose 73 cents, or 2.28 per cent, to $32.74, Millennium & Copthorne Hotels NZ gained 7 cents, or 4.02 per cent, to $1.81, Restaurant Brands rose 11 cents, or 4.23 per cent, to $2.71, Scales Corp rose 14 cents, or 4.19 per cent, to $3.48, Scott Technology rose 16 cents, or 7.27 per cent, to $2.36 and Sky TV rose 6 cents, or 2.41 per cent, to $2.55.
Ventia Services rose 20 cents, or 4.64 per cent, to a new high of $4.51, My Food Bag gained 0.006 cents, or 4.44 per cent, to 14.1 cents, Green Cross Health rose 2 cents, or 2.5 per cent, to 82 cents, Radius Residential Care rose 1 cent, or 5.26 per cent, to 20 cents and Carbon Fund gained 5 cents, or 3.65 per cent, to $1.42.
PGG Wrightson continued to rebound, rising 11 cents or 5.09 per cent to $2.27 from $1.45 three weeks ago.
Gentrack fell 20 cents, or 1.83 per cent, to $10.75, Port of Tauranga fell 8 cents, or 2.06 per cent, to $5.20, The Warehouse fell 2 cents, or 2.06 per cent, to 95 cents, Eroad fell 4 cents, or 3.23 per cent, to $1.20 and NZME fell 2 cents, or 2 per cent, to 98 cents.
Other decliners included TradeWindow, which fell 0.007 cents, or 4.38 per cent, to 15.3 cents; Solution Dynamics, which fell 3 cents, or 2.38 per cent, to $1.23; Rakon, which fell 2 cents, or 2.53 per cent, to 77 cents; and Smartpay, which fell 2.5 cents, or 1.96 per cent, to $1.25.
Cancer diagnostics company Pacific Edge fell 0.001 cent to 8.7 cents after reporting slightly lower test volumes in the first quarter of fiscal 2025, at 7,188, a 0.3 per cent decrease.
The number of tests in the U.S. fell 3.2% to 5,905 compared with the previous quarter, but the number of tests per physician increased from 6.7 to 6.8. A Medicare reimbursement decision on the Cxbladder test is expected by the end of this month, Pacific Edge said.
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