The New Zealand sharemarket finished flat after a rocky day but was boosted by leading insurer Tower’s second earnings upgrade within two months.

The S&P/NZX 50 Index fluctuated between a high of 11,829.88 and a
low of 11,770.06 before closing at 11,785.48, down 2.08 points or 0.02 per cent.

There were 61 gainers and 67 decliners over the whole market with 41.23 million shares worth $144.3 million changing hands.

Matt Goodson, managing director of Salt Funds Management, said the local market fared a lot better than Australia.

“We were open when they were closed for King’s Birthday (on Monday), and the Australian market was playing catch-up with the strong jobs growth and increased bond yields in the United States.

“Australia’s fall was led by commodities and gold stocks which are not part of our index,” Goodson said.

The S&P/ASX 200 Index had fallen 1.41 per cent to 7749.1 points at 6pm NZ time. The major US indices had slight rises with the S&P 500 and Nasdaq Composite reaching new highs after gaining 0.26 per cent to 5360.79 points and 0.35 per cent to 17,192.53 respectively.

At home, ANZ Research has maintained its forecast of 0.2 per cent growth in the first quarter gross domestic product (GDP), in line with the Reserve Bank’s.

ANZ said the GDP details will matter for the Reserve Bank with the underlying state of domestic demand and services momentum key to assessing sticky inflation risks.

“All in all, the GDP data is expected to provide further confirmation that economic momentum is weak and consistent with continued disinflation. But always, there will be some noise to look through.”

ANZ said the annual current account deficit is expected to narrow 0.2 points to 6.7 per cent – still too wide to call sustainable.

Tower increased 3.5c or 4.29 per cent to 85c after upgrading its full-year net profit guidance to greater than $40m, compared with the $35m advised in mid-April.

Tower said no large events, it has an allowance of $45m, have been reported in the financial year so far, and if this continued through to the end of September, the net profit would increase by an additional $32m – that is $72m.

Goodson said Tower reiterated its initial guidance at the end of May within two weeks of the half-year result and at the time “their metrics looked to be showing conservative numbers. Now suddenly you could be talking profit of more than $72m.

“After several years of real pain, Tower is finally getting a pay-back and is in a classic insurance cycle. They have been smashed by big natural events over the past few years, claims cost inflation has leapt and reinsurance costs have gone up,” Goodson said.

“It takes time to lift premiums and the cost inflation is looking like peaking. Tower can have some years of good sailing before the next cycle.”

Freightways was up 14c or 1.75 per cent to $8.14; Summerset Group gained 16c to $9.70; Fonterra Shareholders’ Fund increased 12c or 3.03 per cent to $4.08; and Mainfreight 45c to $69.10.

The property sector was stronger. Argosy increased 3.6c or 3.51 per cent to $1.08; Investore improved 2c or 1.92 per cent; Stride was up 3c or 2.42 per cent to $1.27; and Vital Healthcare Trust gained 4c or 2.09 per cent to $1.95.

Mercury Energy, up 13.5c or 2.06 per cent to $6.70, announced chief executive Vince Hawksworth was retiring at the end of August after more than four years in the role. He has been replaced internally by executive general manager generation Stew Hamilton, who was previously chief executive at New Zealand Aluminium Smelters.

Genesis Energy rebounded 8.5c or 4.05 per cent to $2.185 after being dragged down by the lack of success in lifting the daily production of the Kupe KS-9 well. NZ Oil & Gas told the market that the impacts for the gas field were still under detailed view.

Genesis has 46 per cent, NZOG 4 per cent and operator Beach Energy 50 per cent in the gas field.

Other gainers were Napier Port improving 6c or 2.46 per cent to $2.50; NZME up 2c or 2.3 per cent to 89c; and NZX increasing 4c or 3.85 per cent to $1.08.

Fisher and Paykel Healthcare was down 13c to $29.42 on trade worth $18.72m; Auckland International Airport eased 9c to $7.49; Vulcan Steel fell 33c or 4.26 per cent to $7.42.