NZ stocks slump in line with global markets

New Zealand joined other Asia Pacific markets with a sharp fall of nearly 1.5%, as the latest banking developments and support failed to calm investors’ nerves.

Monday, March 20th 2023, 6:36PM

by BusinessDesk

The S&P/NZX 50 Index slipped gradually throughout the day and closed at 11,564.75, down 160.86 points or 1.37% – its biggest single-day fall in a month. The index is now only 0.8% for the year.

There were 105 decliners and just 28 gainers over the whole market on light trading of 28.9 million share transactions worth $97.67m.

David McConnochie, an investment adviser with Forsyth Barr, said the increased volatility has continued from last week. “Markets are firmly focussed on the financial sector globally and this has flowed into New Zealand.”

Over the weekend, Swiss rival UBS agreed to take over Credit Suisse for US$3.2 billion (NZ$5.11b) with the combined bank having US$5 trillion in assets.

Then the US Federal Reserve announced it is joining a group of central banks, Canada, England, Japan, Europe and Switzerland, in a liquidity operation by increasing the frequency of their US swap line arrangements from weekly to daily.

These moves didn’t gee up the markets. The Hong Kong Hang Seng Index had fallen 2.84% to 18,964.33 points by 6pm, NZ time, Japan’s Nikkei was down 1.26% to 26,989.48, and the S&P/ASX 200 Index had declined 1.37% to 6898.9.

The Shanghai Composite Index was flat after China left its one-year and five-year loan prime rates unchanged at 3.65% and 4.3% respectively.

Investors may just feel a little better later this week when the Federal Reserve and Bank of England are expected to slow the pace of their interest rate hikes with 25 basis points increases or less. The Australian Reserve Bank is producing its latest minutes which may indicate the rate rises are reaching their peak.

McConnochie said the market has largely ignored the fall in US inflation, now down to 6%. “The central banks’ decisions will be a good guide to where monetary policy and interest rates are heading. Our economic growth was lower than expected at minus 0.6% and this will give the Reserve Bank food for thought.”

Red ink

At home, Synlait, down 14c or 4.91% to $2.71, and a2 Milk, declining 35c or 5.16% to $6.43, continued to tumble following Synlait’s significant earnings downgrade on Friday.

Fonterra Shareholders’ Fund increased 17c or 5.03% to $3.55 following the co-operative bumper half-year result, with a 50% rise in net profit.

The dual-listed banks continued to feel the global financial sector squeeze, with ANZ declining 57c or 2.31% to $24.13, and Westpac down 40c to $22.52.

Market leader Fisher and Paykel Healthcare shed 18c to $24.88; Ebos Group was down 89c or 1.94% to $44.91; Auckland International Airport declined 16c or 1.81% to $8.70; Fletcher Building decreased 11c or 2.53% to $4.24; and Vulcan Steel fell 22c or 2.6% to $8.23.

In the energy sector, Meridian was down 7c to $5.15; Contact declined 11c to $7.58; and Vector decreased 6c to $3.89.

Transtasman fuel supplier Ampol fell $2.78 or 7.88% to $32.50, and utilities investor Infratil was down 28c or 3.14% to $8.65.

The property sector was weaker, with Kiwi falling 4c or 4.4% to 87c; Goodman Trust down 5c or 2.37% to $2.06; Argosy declining 3.5c or 3.06% to $1.11; and Investore shedding 4c or 2.68% to $1.45.

Channel Infrastructure, which has just been added to the NZX 50, declined 4c or 2.65% to $1.47; and Restaurant Brands, which has been removed, rose 40c or 6.67% to $6.40.

Other decliners were Tourism Holdings down 7c to $3.99; Scott Technology decreasing 9c or 3.1% to $2.81; Delegat Group shedding 16c or 1.79% to $8.80; NZME giving up 5c or 4.89% to $1.04; and Air NZ down 2c or 2.55% to 76.5c.

The medicinal cannabis companies featured on the gainers' list, with Cannasouth up 2c or 7.14% to 30c; Rua Bioscience gaining 0.007c or 3.87% to 18.8; and Greenfern Industries increasing 0.006c or 7.06% to 9.1c.

Retailers Michael Hill added 2c or 1.9% to $1.07; Briscoe Group increased 16c or 3.37% to $4.91; and Hallenstein Glasson was up 7c to $5.32.

Other gainers were Rakon increasing 2c or 2.35% to 87c; Tower adding 1.5c or 2.46%r to 62.5c; and NZ King Salmon Investments up 1c or 5% to 21c.

NZX, down 1c to $1.17, told the market that Rob Hamilton, former SkyCity chief financial officer, has resigned as a director after the board decided not to endorse him as chair because of the civil proceedings against SkyCity’s Adelaide casino operations.

Tags: Market Close