Solly said the latest business confidence survey was down slightly, but it would not be enough to stop the Reserve Bank from increasing the OCR by 25 basis points on Wednesday.
He said the market was now pricing in four rate rises through to August next year, with the OCR reaching 3.25%.
The ANZ NZ Business Outlook showed confidence fell 2 points in August to 54, while expected own activity eased 1 point to 48. Both are at very high levels. Reported past activity was up another 6 points to 16, led by services.
Inflation indicators were mixed. Inflation expectations lifted from 3.14% to 3.26%, and more firms were expecting cost increases and raising their own prices. But the size of expected cost increases was getting smaller, ANZ said.
The ANZ-Roy Morgan Consumer Confidence index eased 1 point in August to 98, still under par but 18 points higher than its April low.
The net proportion of households thinking it was a good time to buy a major household item fell 5 points to minus 12, suggesting retail remained a tough gig, ANZ said.
Solly said, “We have come through the reporting season unscathed. The results have been solid with an emphasis on cost control and conservative outlook statements.“
With the Middle East situation and our own election baked in, the earnings forecasts haven’t gone up a lot for the next half (of the year), but I think they are heading in the right direction,” he said.
The two market leaders, Fisher & Paykel Healthcare, gaining 60c to $44.40 on trade worth $45.8m, and Auckland International Airport, increasing 29c, or 3.39%, to $8.85 on trade worth $102.9m, had their weightings increased in the MSCI Index.
Other stocks
Other index increases were Infratil up 13c to $14.42; Meridian Energy adding 28c or 5.33% to $5.53 on trade worth $61.1m; Contact collecting 2c to $8.75 and Ryman Healthcare gaining 3c to $2.10.
Those stocks estimated to have decreases in weightings were: Fletcher Building, down 8c or 2.05% to $3.98; Mercury Energy, down 10c or 6.70% to $1.45; Spark, unchanged at $2.14; Goodman NZ, up 2c to $2.02; Kiwi Property, up 0.005c to 92c; and Air NZ, down 0.005c to 39c.
Kiwi Property confirmed its full-year 2027 dividend guidance of 5.75c a share in an investor update.
Vulcan Steel, falling 21c or 3.16% to $6.44, is being removed from the MSCI Australian Small Cap Index.
Michael Hill was up 5c or 12.05% to 46.5c after reporting a 1.9% gain in revenue to A$655.7m (NZ$793.90), a 57% increase in operating earnings (ebit) to $24m, and a 376% rise in net profit to $10m for the 12 months ending June.
Australian store sales were up 2.5% to A$371.8m, Canada 7.3% to C$174.2m, and NZ 3.1% to $112.4m. Online sales grew to 8.7% of the total revenue.
The jewellery retailer said group same-store sales had increased 4.4% during the first eight weeks of the 2027 financial year, and it expected continued profitable growth through the year.
Board chairman Rob Fyfe is stepping down on November 28 and will be replaced by Claudia Batten.
Elsewhere in the retail sector, Hallenstein Glasson was up a further 30c or 2.58% to $11.95 following its strong update on Friday; KMD Brands gained 1.5c to $1.69; The Warehouse was down 1.5c or 2.17% to 67.5c; and Briscoe declined 10c or 2.22% to $4.40.
Gentrack continued its re-rating, gaining 14c, or 3.05%, to $4.73 after trading at $3.68 on May 6. Fonterra Co-operative was up 10c or 2.18% to $4.68, Sky TV increased 10c or 2.82% to $3.65; and Vista Group gained 6c or 2.24% to $2.74.
Delegat Group was up 10c or 2.2% to $4.60; and the dual-listed banking stocks ANZ and Westpac rose 95c or 2.15% to $45.11 and $1.11 or 2.72% to $41.91, respectively.
Winton Land, last traded at $1.05, has been suspended after three directors stepped off the board. Only one independent director remains, which no longer meets the NZX listing rules.