New Zealand shares inched higher but trading was mixed on concerns that US economic growth will take a hit from the longest-ever government shutdown and as investors pared back expectations of a New Zealand rate cut.
The S&P/NZX 50 index rose 2.88 points, or 0.03 percent, to 9108.91. Within the index, 19 stocks rose, 10 were unchanged and 21 fell. Turnover was $114 million.
The partial government shutdown affecting 800,000 federal workers has lasted more than a month and investors are increasingly concerned about the economic impact as it drags on.
Trading is also very tepid after expectations that the Reserve Bank of New Zealand could move to cut rates were pared back after yesterday's inflation data, which showed signs of emerging cost pressure.
"That has meant that potentially a rate cut is off the table," said Peter McIntyre, an investment adviser at Craigs Investment Partners.A rate cut tends to make equities more attractive, in particular those that pay high dividend yields.
Overall, however, "we are really driven by offshore market sentiment," he added.
US markets finished slightly higher after some positive earnings reports, with the Dow Jones Industrial Average up 0.7 per cent, the S&P 500 up 0.2 per cent and the Nasdaq Composite Index up 0.1 per cent.
However, sentiment soured after Ford said its fourth-quarter operating income dropped 28 per cent amid worsening losses in China and Europe, said McIntyre.
The most heavily traded stock on the S&P/NZX 50 was Z Energy, which yesterday increased its full-year earnings guidance by more than $15m due to improved margins following the sharp drop in oil prices late last year. The stock added 2 percent to $6.08, with 3.7 million shares trading hands versus a daily average of 1.1 million during the past three months.
Spark New Zealand was the second most heavily trade stock, gaining 2.7 per cent at $4.13 with 3.4 million shares changing hands, in line with its average. Trade Me - which was unchanged at $6.34, was third.
Chorus also saw heavy trading of 1.3 million shares, ending up 0.1 percent at $4.805.
Among smaller cap companies, PaySauce continued to push higher, gaining 29 per cent at 1.8 cents. Yesterday it said its recurring revenue in the December quarter was 109 per cent ahead of the same quarter of 2017. PaySauce listed on NZX on December 21 via a backdoor listing through the shell of Energy Mad.
McIntyre said the index was weighed by a 1.2 per cent decline in A2 Milk to $12.35. Volumes were light but the stock makes up around 8 per cent of the index.
The stock that fell the most, however, was Sky Television, down 3.1 per cent to $1.89, followed by Heartland Group, down 1.4 per cent to $1.37. Contact Energy shed 1.3 per cent to $6.00.
The biggest gainer was Pushpay Holdings, which added 5.8 per cent to $3.63, followed by Spark and Z Energy.
The NZX added 1 per cent to 99 cents. Earlier it announced it and the Financial Markets Authority have formed a formal review - Capital Markets 2029 - to investigate the drivers of listing activity, something McIntyre said was positive. The number of equities securities on the exchange has fallen from 173 at the end of 2015 to 138 now.
IkeGPS ended down 12.2 per cent at 65 cents. The utilities measurement specialist IkeGPS says it may not break-even at the operating level in the March quarter due to a delay closing a large contract for its Ike Analyze service.
Rubicon shed 2.2 per cent to 22 cents after cutting its earnings guidance, citing a deeper-than-expected impact on its ArborGen business from Hurricane Michael in the US in October.