NZX 50 ends the week flat

The New Zealand sharemarket ended the week flat as investors sat on their hands waiting for more news on the potential impact of the new Omicron coronavirus variant.

The benchmark S&P/NZX 50 Index edged up 6.256 points, or 0.05 per cent, to 12,676.50 yesterday.

Stocks were trading mixed elsewhere in Asia after a broad rally on Wall Street as investors keep an eye on the spread of the new coronavirus variant and measures that governments are taking to restrain it.

Hong Kong slipped more than 1 per cent while Tokyo edged lower. Shanghai and Seoul were higher while Sydney was nearly unchanged.

‘‘It’s the tail end of what has been an interesting week,’’ Jarden director Greg Main said. ‘‘The US market sold down and bounced back and sold down and had a bit of a bounce back again last night.’’

South Africa first reported evidence of the Omicron variant on November 24 from a sample dated November 9.

There was some speculation, however, that the variant may have already been in Europe by the end of November, with the Netherlands later reporting Omicron cases from November 19 and 23, before South African officials raised the alarm. Australia had also dated a case back to November 23.

According to GISAID, a global database tracking Covid-19 variants, Omicron had so far spread to 29 countries – an increase from 18 earlier in the week.

There is uncertainty about whether consumers will go back into their shells with the arrival of the new variant, or whether economies will continue to open up, Main said. Interest rate expectations, which had been rising, had now pulled back amid uncertainty over how central banks would react, he said.

That had buoyed some yield-sensitive sectors such as property and utility stocks, although the gains were mixed, he said. Central banks would have to be ‘‘nimble’’, he said, noting that the recovery was uneven.

‘‘Things still feel a little bit fragile at the edges,’’ he said. ‘‘It’s a bit of a balancing act they have to do.’’

Main said he expected the New Zealand sharemarket to continue to follow leads from overseas markets for the next week or so.

He noted Fonterra’s announcement of a record milk price for this season would be good for the New Zealand economy, especially given the lack of international tourists.

The co-operative lifted and narrowed its forecast and is now expecting to pay its farmer suppliers between $8.40 and $9 per kilogram of milk solids. The midpoint of the range, which farmers are paid off, increased to $8.70 per kgMS, which would contribute more than $13.2 billion to the economy.