Unsettled NZ market sheds 1%

The New Zealand sharemarket ended a volatile week with a near 1% fall as the prospect of more interest rate rises to combat inflation reared up and unsettled investors.

Friday, March 10th 2023, 6:25PM

by BusinessDesk

After another sell-off on Wall Street (the second this week), the S&P/NZX 50 Index fell sharply at the opening and closed at 11,727.04, down 99.11 points or 0.84%.

The index was down 1.2% for the week and is now only 1.9% ahead for the year.

There were 98 decliners and 29 gainers over the whole market with 22.5 million shares worth $116.29 million changing hands.

Shane Solly, portfolio manager with Harbour Asset Management, said there was a brief period in January when people thought inflation was coming down and markets rallied but that has all evaporated.

“The data points have shown the need for central banks to continue the fight against inflation and keep increasing rates. Macro-economics is dominating market trends,” he said.

Investors and analysts overnight were watching the latest United States non-farm payroll numbers. They expected 225,000 new jobs were created in February, down from the surprise 517,000 in January. This triggered fears of further rises in interest rates.

Solly said: “If the payroll figure was higher than expected, then the Federal Reserve will need to continue raising rates to cool employment and wage pressures and slow the economy.”

Wall Street was rattled when Silicon Valley bank SVB Financial’s share price plunged 60% after telling the market it is raising US$2.25 billion (NZ$3.7b) to help offset losses on bond sales.

“There’s a little bit of a banking crisis in the technology space with SVB facing declining deposits from tech start-ups,” said Solly. The financial sector within the S&P 500 Index fell 4.1%.

The Dow Jones Industrial Average was down 1.66% to 32,254.86; the S&P 500 declined 1.85 % to 3918.32; and the Nasdaq Composite shed 2.05% to 11,338.35.

Across the Tasman, the S&P/ASX 200 Index had plunged 2.41% to 7134.7 points at 5.45pm NZ time.

The dual-listed banks felt the Wall Street rumble with ANZ down 88c or 3.33% to $25.52 and Westpac declining 65c or 2.7 % to $23.43 on the NZX. The energy stocks were again weaker, with Meridian down 8c to $5.482, Contact decreasing 8c to $7.50, Mercury declining 5c to $6.25 and Vector shedding 7c to $3.93.

Fisher and Paykel Healthcare was down 19c to $25.71, Ebos Group shed 34c to $45.41, Mainfreight declined 57c to $70.48, a2 Milk fell 18c or 2.47% to $7.12, Synlait decreased 9c or 2.74 % to $3.20 and Port of Tauranga was down 13c or 2.08% to $6.12.

Ryman Healthcare settled at $5.28, down 16c or 2.94%, after completing its $902m capital raise after clearing the retail bookbuild of 25 million new shares at $5.25 a share. Ryman is repaying its US private placement loan.

Summerset Group declined 15c to $8.70, Chorus was down 11c to $8.05, Sky TV gave up 5c or 1.96 to $2.50, Serko shed 5c or 2.17 % to $2.25. NZME decreased 2c or 1.82% to $1.08 and NZ Rural Land Co was down 2c or 2% to 98c.

Amongst the property companies, Vital Healthcare Trust fell 7c or 2.95% to $2.30, Kiwi decreased 21.5c or 2.73% to 89c, Argosy declined 3c or 2.56% to $1.14 and Precinct was down 2c to $1.26.

Retailers Michael Hill fell 4c or 3.67% to $1.05, Hallenstein Glasson declined 9c or 1.7% to $5.21, KMD Brands shed 2c or 1.89% to $1.04 and Briscoe Group was down 4c to $4.75.

Auckland International Airport was up 7c to $8.61, Restaurant Brands gained 11c to $6.41, Ventia Services added 4c to $2.50 and South Port NZ collected 25c or 3.23% to $8.

Hospitality group Savor rose 3c or 7.69% to 42c, Carbon Fund was up 4c or 2.09% to $1.57 and Cannasouth gained 2c or 7.14% to 30c.

Chatham Rock Phosphate, unchanged at 22.5c, has signed a lease to establish the Korella distribution hub on a 22 hectare site at Cloncurry in Queensland.

Tags: Market Close