Jan 22 (BusinessDesk) – New Zealand stocks eased slightly until a late rally, in line with cautious sentiment across the Asian region ahead of a crucial Bank of Japan decision to loosen monetary policy, announced just before 5pm local time.
The NZX50 Index rose 1.90 points, or 0.45 percent, to 4,187.082. Within the index, 27 stocks rose, 16 fell and seven were unchanged. Turnover was $95.001 million.
“It seems to have been a bit of a pause for breath day across the region,” said Andrew Bascand, managing director and portfolio manager at Harbour Asset Management, in Wellington.
The BoJ decision, reported on Bloomberg at just after 5pm, confirmed bold steps by the Japanese monetary authorities to run a US Federal Reserve-style quantitative easing policy and a doubling in the country’s inflation target from 1 percent to 2 percent.
The moves reflect newly elected Japanese Prime Minister Shinzo Abe’s push to end two decades of deflation in what remains one of the world’s three largest economies.
“I’ve heard more commentary about Japan in the first three weeks of this year than I have in the last three years,” said Bascand. “People are calling it ‘Abe-onomics’.”
Leading gainers were Steel & Tube, up 4.31 percent to $2.66, and ASX-listed Telstra Corp, up 2.68 percent to $5.75, while PGG Wrightson rallied from falls over the last week, closing up 2.22 percent at 45 cents and is still 12.5 percent higher than a month ago.
Biggest loser on the day was aged care provider Metlifecare, which was down 2.15 percent to $3.18, while Fletcher Building came off 20 month highs, to close at $9.19, down 0.11 percent.
Fonterra Shareholders Fund also continued to lose ground won during last week’s brief spurt to above $7.50, closing the day down 1.1 percent at $7.22 per unit.
“It’s exactly where it was for the first and second weeks of January,” said Bascand, indicating last week’s price surge was caused by index-linked portfolio managers upping their holdings to reflect FSF’s entry into the NZX50 yesterday.