Investors lift shares after a less hawkish Reserve Bank outlook

The S&P/NZX 50 Index had fallen to 11,862.42 points and then jumped to an intraday high of 11,995.27 when the Reserve Bank announced an expected 25 basis points rise in the official cash rate (OCR) to 5.5%.

What wasn’t expected was the message that the bank still sees 5.5% as the peak for the OCR and it expects rate cuts from the third quarter next year.

The index closed at 11,971.83, up 27.63 points or 0.23% – a turnaround of about 0.9%. There were 77 gainers and 49 decliners on the main board, with 32.25 million shares worth $133.3m.

Wholesale interest rates fell and the NZ dollar weakened – from US62.50 cents before the bank announcement to US61.70c against the American greenback, and from A$94.60c to $93.50c against the Australian dollar.