Shares decline as global headwinds endure

New Zealand shares edged lower as global investor sentiment weakened.

Thursday, October 22nd 2020, 7:28PM

by BusinessDesk

The S&P/NZX 50 Index fell 25.32 points, or 0.2 percent, to 12,407.29. Within the index, 21 stocks fell, 19 rose, and 10 were unchanged. Turnover was $168.6 million.

The decline came despite some encouraging updates from local companies, with traders deterred by uncertainty in offshore markets.

“The usual suspects are in play: stimulus, coronavirus and the (US) election. They’re the three main issues that are hampering market performance,” said Peter McIntyre, an investment advisor at Craigs Investment Partners.

Chorus led the market lower, falling 2.1 percent to $8.34, as investors took some profit from well-performing stocks.

Fisher & Paykel Healthcare declined 1.7 percent to $35.80 and Meridian Energy 1.4 percent to $5.34.

Auckland Airport bounced 2.2 percent to $7.38 after its annual general meeting this morning.

“It’s really better domestic performance that is holding up that business at this stage,” McIntyre said.

The airport’s operating earnings averaged approximately $10 million per month across July to September, an improvement from the small losses prior.

Air New Zealand remained unchanged at $1.51.

Fast-food operator Restaurant Brands rose 1.9 percent on a trading update showing sales increased by 12.8 percent in its third quarter, driven by the inclusion of its Californian acquisition for the first time as well as strong sales in existing businesses.

Kathmandu released its annual report, showing underlying profit down almost 50 percent. The stock fell 0.8 percent to $1.28, although the earnings numbers had already been released last month.

Medicinal cannabis company Rua Bioscience jumped 40 percent to 69 cents as it was floated on the NZX this morning. The medicinal cannabis producer is the first listed company headquartered in Tairāwhiti, the first founded by a Māori community, and the first IPO on the NZX this year.

Shares in NZX itself rose 2.9 percent, the day’s biggest gain, to $1.77. McIntyre said investors may be energised about having new listings, but buying was likely due to the stock offering a decent dividend yield compared to term deposits.

In currency markets, the US dollar fell as investors trading on the ‘will-they, won’t-they’ drama of fiscal stimulus negotiations took a more optimistic view on Wednesday night.

The kiwi dollar was trading at 66.45 US cents at 5pm in Wellington, up from 66.08 cents yesterday.

The trade-weighted index was at 71.23 at 5pm, from 70.86 yesterday. The kiwi was trading at 93.72 Australian cents from 93.34, was unchanged at 69.60 yen, rose slightly to 56.12 euro cents from 55.78 cents, was steady at 50.62 British pence from 50.91 pence, and traded at 4.4304 Chinese yuan from 4.3983 yuan.

Tags: Market Close