NZ shares follow US fall

New Zealand shares generally fell on Monday as investors in the Pacific caught up with the sell-off that hit US markets on Friday night.

Monday, May 2nd 2022, 7:54PM

by BusinessDesk

The S&P/NZX 50 Index fell 100 points, or 0.8%, to 11,784.36. Turnover was light at just $95 million.

This decline was modest compared to the 3.6% hit the US benchmark S&P 500 Index took on Friday when investors dumped Amazon stock after it gave a disappointing update.

ASB economist Chris Tennent-Brown said the local share market was down more than 10% from its peak early last year.

“But so are global shares, with the MSCI index of world shares also dipping beyond the 10% mark,” he said in a note.

The focus this week will be on more US earnings reports and a run of central bank policy decisions, he said. First up is the Reserve Bank of Australia on Tuesday, followed by the Bank of England and the all-important US Federal Reserve. The latter is expected to put through a 50-basis point hike as it tries to reel in runaway inflation.You have copied (c) copyrighted material from BusinessDesk. This is a breach of our terms and conditions unless you are a corporate subscriber copying for internal use. Please consider a group subscription or forward a link. To upgrade your account email info@businessdesk.co.nz.

Stride Property led the local index lower, falling 4% to $1.90, followed by Skellerup Holdings down 3.6% at $5.51 and the newest index member, Warehouse Group, which fell 3.2% to $3.34.

Ten of the top 50 stocks fell more than 2%, while just four made gains.

Trustpower today finalised the sale of its gas, telecommunications, and retail electricity supply business to Mercury NZ for $467m, which includes a $41m working capital estimate.

The electricity generator will rebrand as Manawa Energy – using the ticker MNW – and focus on generation and supply to industrial customers.

Shares in the company were up 2.4% at $6.90.

Vital Healthcare Property Trust units fell 2.7%, to $3.035, after completing the first part of its capital raise, bringing in $109.8m as institutional investors took up 98% of their entitlement.

The remaining 4.6m units were sold in a bookbuild, which cleared at $3.04 or a 3.1% premium to the $2.95 offer price.

Air New Zealand’s rights offer closed at 5pm today and the shortfall bookbuild – to sell any unexercised rights – starts tomorrow.

Shares in the company closed at 87.5 cents, down 1.1%.

Rights trading finished last Tuesday at 70c, which is equal to 88c per share.

Struggling tech stocks, Eroad and Plexure both got a small bounce today, up 1.9% and 3.7% at $3.20 and 28c, respectively.

The NZ dollar continued to nosedive, after falling more than 7% during April, and was trading at 64.35 US cents at 3pm in Wellington, down from 65.04 cents on Friday.

BNZ strategist Jason Wong said the NZ dollar was now sitting near a two-year low. The American dollar has been gaining strength as investors seek a safe harbour from market volatility.

Tags: Market Close