NZ sharemarket down 0.5%

The New Zealand sharemarket tumbled 0.5% as investors became nervous about the timing of interest rate cuts.

Wednesday, April 3rd 2024, 6:40PM

by BusinessDesk

The S&P/NZX 50 Index was rescued with a late rise in the matching session and closed at 12,040.49, down 55.35 points or 0.46%, after reaching an intraday low of 11,956.92 following big falls on Wall Street.

There were 81 decliners and 61 gainers on the main board, with 32.09 million shares worth $115.35m changing hands.

The markets were jittery following recent strong economic data in the United States, sending the US 10 Year Treasury Note yield to its highest level (4.349 per cent) since the end of November. The NZ 10 Year Government Bond yield was up 3.7 basis points to 4.651%.

Crude oil has risen to a five-month high at US$84.76 (NZ$141.94) a barrel.

The Dow Jones Industrial Average declined 1% to 39,170.24 points and has fallen 1.6% in two trading days; the S&P 500 was down 0.72% to 5,205.81; and the Nasdaq Composite fell 0.95% to 16,240.45.

Mark Lister, investment director with Craigs Investment Partners, said the markets had started this week on the backfoot after a very strong run through the first three months of the year.

“Inflation is still somewhat problematic. The indicators of a strong US economy is a good thing, but interest rates may not come down as quickly. It’s a case of good economic news being a headwind for the interest rate and inflation environment.”

Lister said markets were rethinking whether the Federal Reserve would cut rates in June or hold fire until later.

“Fed chair Jerome Powell is speaking at Stanford University overnight, and this will be closely followed. The Reserve Bank of New Zealand [RBNZ] meets next week, and they are expected to continue talking tough,” he said.

Local market

Fisher and Paykel Healthcare dragged the local market down, falling 77c or 2.94% to $25.40 after similar stocks were weaker in the US.

Freightways was down 12c to $8.83; Winton Land declined 4c or 1.8% to $2.18; NZME decreased 2c or 2.22% to 88c; Allied Farmers shed 2c or 2.7% to 72c; and Solution Dynamics fell 5c or 3.45% to $1.40.

In the energy sector, Mercury fell 20c or 2.89% to $6.72, and Vector was up 12c or 3.15% to $3.93.

The latest Global Dairy Trade auction saw the index increase 2.8% – its biggest rise in two months and reversing the same fall two weeks ago.

Whole milk powder rose 3.4% to an average of US$3,246 per metric tonne, and skim milk powder was up 1.4% to US$2,550/MT. Cheddar recorded the largest increase of 4.1% to US$4,340/MT, with butter up 3.1% to US$6,592/MT.

Fonterra Shareholders’ Fund was up 7c or 1.94% to $3.68, while a2 Milk was down 5c to $6.60. Synlait Milk declined a further 2c or 2.86% to 68c.

Synlait is considering a capital raise to strengthen its balance sheet and is undertaking a strategic review of its North Island assets – the Pokeno processing plant, Auckland blending and canning facility and warehousing, which are under-utilised. It is still trying to sell the Christchurch-based Dairyworks.

Hallenstein Glasson was up 11c or 1.74% to $6.44; Skellerup added 10c or 2.22% to $4.60; Vulcan Steel gained 23c or 2.51% to $9.40; Millennium & Copthorne Hotels NZ collected 4c or 2.21% to $1.85; and Arvida Group increased 4c or 3.7% to $1.12.

Stride Property added 5c or 3.85% to $1.35; Carbon Fund was up 7c or 4.32% to $1.69; PaySauce increased 3c or 13.64% to 25c; Eroad rose 7c or 8.75% to 87c; Steel & Tube improved 2c or 1.9% to $1.07; and Blackpearl Group was up 2c or 2.94% to 70c.

Scott Technology, up 2c to $2.86, told the market that John Kippenberger will remain chief executive until the end of August, supported by Aaron Vanwalleghem, president of Europe and North America.

Argosy Property, gaining 2.5c or 2.22% to $1.15, has sold a property in Forge Way, Auckland, for $35.2m, 1.1% above its book value and to be settled in March next year.

Artificial intelligence company Being AI rose 2.5c or 100% to 5c on its second day of trading following the reverse takeover of Ascension Capital. Trading in the company was light, with 32 trades worth 72,500.

Tags: Market Close