NZ shares sink as investors watch for inflation

New Zealand shares fell in line with US markets and ahead of tomorrow’s local consumer price index data.

Tuesday, April 20th 2021, 6:47PM

by BusinessDesk

The S&P/NZX 50 Index fell 89.28 points, or 0.7 percent, to 12,678.55. Within the index, 34 stocks fell, 14 rose, and two were unchanged. Turnover was $168.5 million.

This decline tracks a similar one on Wall Street overnight with the S&P 500 dropping half a percent and the Nasdaq down 1%.

US markets have been sitting at record highs, but investors have taken some risk off the table ahead of a highly anticipated earnings season.

NZ’s market has been less buoyant, is still down 2.5% year to date, and fell at midday when Australia’s stock exchange opened weaker.

Greg Smith, head of research at Fat Prophets, said bond yields had risen a little, suggesting investors may expect central banks to raise interest rates soon if inflation does appear. First quarter consumer price index data is being released tomorrow.

Yield stocks were generally weaker. Napier Port led the decline, down 4.2% to $3.44, closely followed by Argosy Property, which slipped 3.9% to $1.47.

Clean energy stocks continue to attract heavy volumes as ownership continues to settle after BlackRock sold the majority of its positions in NZ electricity companies.

Contact Energy declined 3.2% to $7.50, with 3.8 million shares traded, and Meridian Energy fell 2.4% to $5.75 on a volume of 5.4m shares. Mercury NZ slipped 2.3% to $6.665.

A2 Milk Company was down 3.4% at $8.62. American multinational investment bank, Morgan Stanley, ceased being a significant shareholder in the dairy brand after selling a net 2.3m shares this month. Its key supplier, Synlait Milk, also dropped 2.3% to $3.45.

Only a handful of stocks saw meaningful gains, among them Spark NZ, which rose 2.4% to $4.48 and Ryman Healthcare, up 2% at $14.50.

The kiwi dollar was trading 72.08 US cents at 5pm in Wellington, up from 71.41 cents yesterday.

The trade-weighted index was at 74.95 at 5pm, from 74.61 yesterday. The kiwi traded at 92.49 Australian cents from 92.33, 78.02 yen from 77.60 yen, 59.73 euro cents from 59.71 cents, 51.51 British pence from 51.54 pence, and 4.6812 Chinese yuan from 4.6594 yuan.

Tags: Market Close