Profit-taking pulls shares lower

New Zealand shares took another fall as investors took profits from well performing stocks after US tech stocks continued to decline on Wall Street.

Friday, September 11th 2020, 6:09PM

by BusinessDesk

The S&P/NZX 50 Index fell 63.75 points, or 0.5 percent, to 11,748.03. Within the index, 24 stocks fell, 20 rose and six were unchanged. Turnover was $154 million.

After a one-day reprieve, Wall Street resumed its selloff overnight giving another negative lead to Asian markets.

Australia’s S&P/ASX 200 was down 0.6 percent in late trading, mainland Chinese bourses were off 0.2 percent each, while Kong Hong’s Hang Seng rose 0.6 percent.

United States equity indices dropped between 1 and 2 percent Thursday night as high valuations struck a discordant note with weak economic data.

The US senate spiking another fiscal stimulus package did little to help market mood either.

“The selloff that we’ve seen so far this month in the hot tech stocks in the US market has put a dampener on local sentiment and has seen profit taking across quite a few names that had been performing well recently,” said Sam Trethewey, a portfolio manager at Milford Asset Management

A top performer throughout the pandemic, Fisher & Paykel Healthcare succumbed to profit taking. The respirator manufacturer fell 1.5 percent to $33.10.

Covid hospitalisations are slowing, which is good news for the US but is seen by the market as an indicator for F&P Healthcare’s sales, Trethewey said.

Other big companies were mixed. A2 Milk Co rose 0.2 percent to $17.91 and Meridian Energy climbed 0.4 percent to $4.99, while Spark New Zealand dropped 0.4 percent to $4.77 and Auckland International Airport declined 1.4 percent to $7.01.

Vista Group International, which saw a strong bounce at the end of August, gave up some ground, dropping 1.6 percent to $1.82.

Sky Network Television recovered a little from its 10 percent dive yesterday, climbing 1.4 percent to 15 cents. Chief executive Martin Stewart took the opportunity post-result to buy 250,000 shares today for $37,500 – an average of 15 cents per share.

Property and retirement stocks outperformed today after the Real Estate Institute of New Zealand data showed strong growth in house prices.

“That strength does validate the run some of the retirement villages have had lately,” Trethewey said.

Precinct Properties gained 1.2 percent at $1.685, Oceania Healthcare rose 1 percent to $1.04, Summerset Group Holdings was up 0.6 percent at $8.50 and Ryman Healthcare advanced 0.3 percent to $13.74.

Pushpay Holdings posted the day’s biggest gain, rising 2 percent to $7.50 and Vector saw the largest decline, falling 3.9 percent to $4.40 — although on very light volume.

The New Zealand dollar sunk overnight as the further decline in equity markets drove investors away from the kiwi and back to haven currencies.

The kiwi dollar fell as low as 66.37 US cents and was trading at 66.61 cents at 5pm in Wellington, down from 66.80 cents yesterday.

The trade-weighted index was at 71.79 at 5pm, from 71.95 yesterday. The kiwi traded at 91.52 Australian cents from 91.87 cents, 70.71 yen from 70.87 yen, 56.27 euro cents from 56.51 cents, 51.95 British pence from 51.40 pence, and 4.5548 Chinese yuan from 4.5679 yuan.

Tags: Market Close