Logistics stocks led NZ shares marginally lower

New Zealand's headline share index was virtually unchanged as investors watched for signs the covid-19 delta variant might be slowing the rebound in global economic activity.

Tuesday, August 3rd 2021, 6:58PM

by BusinessDesk

The S&P/NZX 50 Index fell 2.5 points, or 0.02%, to 12,700.5. Turnover was light for a second day at $105 million.

The yield on US government bonds continued to fall with the 10-year rate now trading below 1.15% after some soft manufacturing data in America hinting the rate of recovery may be slowing.

Jarden economist John Carran said financial markets have been recalibrating their expectations for future growth.

“This is reflected by falling interest rates on longer-maturity government bonds, which has been driven recently by declining real interest rates,” he said in a note.

The world’s two largest economies have been underperforming expectations, he said, with the resurgence of covid-19 cases delaying a complete lifting of mobility restrictions and social distancing.

China is experiencing its biggest outbreak of covid in six months, with a small number of cases quickly spreading over almost half of the country’s 32 provinces. While there are only about 300 cases, the delta variant can spread quickly.

“The economy of our main export market, China, is slowing. This could reduce demand for some of our main exports, such as dairy, meat and horticulture,” Carran said.

Two logistics stocks led the decline on the NZX today, Port of Tauranga fell 2.5% to $6.90, while Mainfreight declined 2.1% to $83.11 as it backed away from a recent record high.

Other exporters such as Skellerup Holdings, down 2.5% at $5.01, and A2 Milk Company, down 1.6% at $6.29, were also underperforming in the market today.

Stocks across the board were fairly mixed however, with Tourism Holdings posting the biggest gain as it rose 2.1% to $2.40 – though still down 6.2% year-to-date.

Fisher & Paykel Healthcare shares rose 1.4% to $32.84, roughly in the middle of its trading range between $27 and $37 this year.

Infratil completed the sale of its 65.2% stake in Tilt Renewables for gross proceeds of almost $2 billion today. The infrastructure investor has used some of this money to fully repay its existing bank debt, but is still left with plenty of cash on hand to buy new assets.

The company’s share price declined 0.3% to $7.30, today.

The kiwi dollar was trading 69.97 US cents at 5pm in Wellington, up from 69.63 cents yesterday.

The trade-weighted index was at 74.15 at 5pm, from 73.90 yesterday. The kiwi traded at 94.97 Australian cents from 94.91, traded at 76.43 yen from 76.39 yen, 58.92 euro cents from 58.70 cents, 50.35 British pence from 50.12 pence, and 4.5228 Chinese yuan from 4.5012 yuan.

Tags: Market Close