Volatile stocks drive NZ sharemarket down nearly 0.5%
The New Zealand sharemarket fell nearly 0.5%, dragged down by volatile Fisher and Paykel Healthcare, as unemployment reached its highest level in four years.
Wednesday, February 5th 2025, 7:00PM
by BusinessDesk
The S&P/NZX 50 Index had a short bounce midday but otherwise continued its downward trend and closed at 12.844.59, declining 60.45 points or 0.47% after reaching an intraday high of 12,905.04.
Volumes were solid in the last trading session before Waitangi Day (when the market is closed), with 28.7 million share transactions worth $168.2m.
The trading was again dominated by Fisher and Paykel Healthcare, falling $1.32 or 3.67% to $34.60, with 1.18m of its shares worth $40.9m changing hands.
Trump tariffs
Greg Smith, head of retail with Devon Funds Management, said there was continued uncertainty for investors over Fisher and Paykel.
“No one knows what will happen to the tariffs, but Fisher and Paykel had already indicated the tariff on Mexico would push out the timeline for achieving its gross margin target of 65%,” Smith said.
In the latest development, China said it will impose additional tariffs of 15% on coal and liquified natural gas imports from the US, starting next week, in retaliation for the 10% tariff on Chinese goods to the US. China will also levy 10% higher duties on American crude oil, farm equipment and certain cars and trucks.
Wall Street rebounded in its latest trading session. The Dow Jones Industrial Average was up 0.3% to 44,556.04 points; S&P 500 gained 0.72% to 6,037.88; and Nasdaq Composite increased 1.35% to 19,654.02.
Across the Tasman, the S&P/ASX 200 Index had gained 0.5% at 8,415.7 points at 6pm NZ time.
Labour market
At home, unemployment climbed to 5.1% in the December quarter, up from 4.8% in September – the highest level since September 2020 when it was 5.2%.
Employment contracted 0.1% quarter-on-quarter, the participation rate fell 0.1% to 71%, and 156,000 people are unemployed.
ANZ Research said the labour market is operating with a large degree of excess capacity, and measures of wage growth remain on a path to levels consistent with inflation near the Reserve Bank’s 2% target midpoint.
ANZ said the latest data all but locks in a 50-basis points cut in the official cash rate (OCR) at the Reserve Bank’s meeting on Feb 19. The bank is still forecasting a further 25-basis points cut in April and the OCR ultimately falling below the 3.5% trough.
Insurer Tower increased 5.5c or 4.23% to $1.355 after upgrading its full-year net profit guidance to $60m-$70m from $50m-$60m. Tower has recorded one large event during this financial year – the October Dunedin flooding costing it $3m.
Guidance for gross written premiums was revised to 7-12%, from 10-15%, with a reduction in Tower's average premiums due to higher-than-expected proportions of lower risk new house insurance and motor policies.
Smith said Tower is in a sweet spot, benefitting from benign claims. Tower has had a change in the mix of premiums, but they are still growing.
Other stocks
Auckland International Airport was down 9.5c to $8.75; Michael Hill decreased 2c or 3.57% to 54c; Scott Technology eased 5c or 2.35% to $2.08; Move Logistics shed 2c or 8.33% to 22c; Ventia Services declined 10c or 2.31% to $4.23; and Serko fell 14c or 3.84% to $3.51.
Other decliners were Accordant Group falling 3c or 6.52% to 43c; 2 Cheap Cars down 2c or 2.5% to 78c; Blackpearl Group decreasing 5c or 5.32% to 89c; General Capital shedding 2.5c or 7.94% to 29; and CDL Investments down 2c or 2.63% to 74c.
Ebos Group was up 40c to $41.40; Mercury Energy gained 7c to $6.40; Genesis Energy increased 10c or 4.58 to $2.85; Freightways added 15c to $10.95; Gentrack collected 35c or 2.7% to $13.30; and a2 Milk was up 7c to $6.59.
Vista Group gained 9c or 2.73% to $3.39; Synlait Milk increased 3c or 5.45% to 58c; Heartland added 3c or 2.75% to $1.12; Winton Land was up 9c or 4.95% to $1.91; and Skellerup collected 15c or 3.01% to $5.13.
Seeka added 14c or 4.43% to $3.30; Bremworth climbed 5c or 9.09% to 60c; Rakon increased 3c or 5.26% to 60c; PGG Wrightson was up 4c or 2.21% to $1.85; NZ Rural Land gained 3c or 3.33% to 93c; and Scales Corp improved 10c or 2.43% to $4.22.
Air NZ was unchanged at 63.5c after reporting a 0.6% decrease in passengers to 1.632m in December. Domestic passengers were down 4% to 1.039m, Tasman/Pacific increased to 405,000, and long haul was up 4.5% to 188,000. Capacity was down 1.2% compared with December 2023.
Sky TV decreased 3c to $2.72 following the sudden departure of chief financial officer Ciara McGuigan. Deloitte partner Andrew Hirst has replaced her in an interim role.
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