New Zealand shares end slightly higher in thin trade; Australian markets closed

New Zealand shares closed marginally higher on Monday in a thinly traded session, with investors taking stock of a stubbornly high domestic inflation reading, while markets in Australia were closed for a public holiday.

New Zealand’s S&P/NZX 50 index closed the session by edging 0.1% higher at 13,460.74 points.

The benchmark ended 0.8% lower on Friday.

The index logged light volumes, with 6.4 million shares changing hands, about 0.3 times the 30-day average.

Trading volumes were extremely light as the Australian market was closed for “Australia Day” and Auckland observed its anniversary holiday, taking an estimated 90% of buyers and sellers out of the market, said Grant Davies, a financial adviser at Hamilton Hindon Greene.

Trading on the NZX remained open, although participation was limited, Davies added. Data on Friday showed consumer prices rose 0.6% in the quarter, taking annual inflation to 3.1%, above forecasts and nudging past the upper end of the central bank’s target range.

Investors are anticipating an economic recovery, with higher inflation reinforcing the belief that the central bank will refrain from further rate cuts to avoid exacerbating inflation, added Davies.

The Reserve Bank of New Zealand meets next on February 18, with interest rate swaps pricing in a 98.6% chance of a hold.

However, swaps also indicate a 63.7% probability of a rate hike at the central bank’s September meeting. For the day, retailer Briscoe Group slid 2.5% to hit its lowest level since late December.

Energy suppliers Meridian Energy and Vector lost 1.8% and 1.2%, respectively.

New Zealand-listed shares of lender ANZ declined 1.7% to log its sixth straight session of losses.

Bucking the trend, Contact Energy and EBOS Group both added 1.2% and 1.4%, respectively.