NZ sharemarket dips for the fourth day in a row

The New Zealand sharemarket’s main index gave up more than a half percent – its fourth down day in a row – accompanied by another earnings warning, this time from Colonial Motor Company.

Thursday, January 18th 2024, 6:27PM

by BusinessDesk

After a weak day on Wall Street, the S&P/NZX 50 Index fell at the opening, kept sliding and closed at 11,687.18, down 79.85 points or 0.68%.

The index has fallen 1.45% so far this week. The overall market featured 34 gainers and 88 decliners on volumes of 39.79 million share transactions worth $82.79m.

In the United States, the Dow Jones Industrial Average was down 0.25% to 37,266.67 points; the S&P 500 declined 0.56% to 4739.21; and the Nasdaq Composite fell 0.59% to 14,855.62.

US retail sales for December were stronger than expected, indicating a resilient consumer and putting aggressive rate cuts from the Federal Reserve in doubt.

Across the Tasman, the S&P/ASX 200 Index was down 0.58% to 7350.1 points at 6pm NZ time.

Lumpy data

Matt Goodson, managing director of Salt Funds Management, said, “The local market was pretty mixed and lumpy following weak leads from the US and Australia, but we are seeing more activity.”

He said Australia’s employment numbers were weaker than expected, which is a positive as it reduces the risk of the Reserve Bank of NZ (RBNZ) hiking rates next month.

ANZ Research expects NZ's annual inflation – the latest consumer price index will be released next week – to fall sharply to 4.7%, below the RBNZ’s forecast of 5%.

The fall, however, will be driven by the tradables component, down from 4.7% to 3.4%, while non-tradable (domestic) inflation is expected to be 5.7% at the end of December.

Stats NZ said food prices last month were 4.8% higher than a year earlier, but price increases have slowed. It was the lowest annual food price increase since December 2021.

Fruit and vegetables were up 2.5% last month, but meat, poultry and fish, grocery food, non-alcoholic beverages and alcoholic beverages were all cheaper.

Auckland International Airport was down 15c or 1.74% to $8.48; Summerset declined 18c to $10.61; Ryman Healthcare shed 15c or 2.5% to $5.85; Port of Tauranga decreased 15c or 2.65% to $5.50; Freightways gave up 14c to $8.45; and Chorus was down 12c to $7.63

In the energy sector, Meridian was down 6c to $5.55; Mercury declined 8c to $6.52; Contact shed 12c to $8.04; and Genesis increased 4.5c or 1.81% to $2.53.

Synlait fell 7c or 7.45% to 87c and a2 Milk was up 5c to $4.51. Goodson said the market is concerned about whether Synlait can sell Dairyworks and if it needs to raise capital.

Car sales

Although unchanged at $8.45, Colonial Motor Company told the market it expects a near 30% fall in its six-month result from a previous record high. Around half of this decrease occurred in December.

Colonial said the anticipated consumer delay in buying light commercial and SUV vehicles became evident through November and worsened in December.

Goodson said new car sales are more cyclical than used cars, and the changes to the ute tax and clean car discount haven't helped Colonial’s performance.

Infratil, down 5c to $10.195, said its 48%-owned CDC Data Centre has secured more than 110MW of new customer contracts to support further development and growth. The new contracts take place over the next three years.

CDC, which makes up 30% of Infratil’s assets, has increased contracted capacity by more than 200MW over the past 12 months and is expanding by a further 265MW.

“The new contracts de-risk the significant expansion of CDC,” said Goodson.

Amongst the retailers, Michael Hill gained 3c or 3.23% to 96; Briscoe Group was down 8c or 1.72% to $4.56; and Hallenstein Glasson declined 19c or 3.33% to $5.51.

Other decliners were Vulcan Steel, down 19c or 2.38% to $7.81; Heartland Group, declining 4c or 2.7% to $1.44; Eroad, shedding 2c or 2.17% to 90c; Arvida Group, decreasing 3c or 2.59% to $1.13; and Goodman Property Trust falling 3c or 4.48% to 64c.

Scales Corp was one of the day’s biggest risers, gaining 13c or 4.01% to $3.37.

Tags: Market Close