New Zealand joined other Asia Pacific markets with a sharp fall, of nearly 1.5 per cent, as the latest banking developments and support failed to calm investors’ nerves.
The S&P/NZX 50 Index slipped gradually throughout
the day and closed at 11,564.75, down 160.86 points or 1.37 per cent – its biggest single-day fall in a month. The index is now only 0.8 per cent 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 $97.67 million.
David McConnochie, investment adviser with Forsyth Barr, said the increasing volatility has continued from last week. “Markets are firmly focused 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 ($5.1b) with the combined bank having US$5 trillion in assets.
Then the United States 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 per cent to 18,964.33 points by 6pm, NZ time, Japan’s Nikkei was down 1.26 per cent to 26,989.48, and the S&P/ASX 200 Index had declined 1.37 per cent 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 per cent and 4.3 per cent 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 per cent. “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 per cent and this will give the Reserve Bank food for thought.”
At home, Synlait, down 14c or 4.91 per cent to $2.71, and a2 Milk, declining 35c or 5.16 per cent to $6.43, continued to tumble following Synlait’s significant earnings downgrade on Friday.
Fonterra Shareholders’ Fund increased 17c or 5.03 per cent to $3.55 after the co-operative’s bumper half-year result, with a 50 per cent rise in net profit.
The dual-listed banks continued to feel the global financial sector squeeze, with ANZ declining 57c or 2.31 per cent 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 per cent to $44.91; Auckland International Airport declined 16c or 1.81 per cent to $8.70; Fletcher Building decreased 11c or 2.53 per cent to $4.24; and Vulcan Steel fell 22c or 2.6 per cent 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 per cent to $32.50; and utilities investor Infratil was down 28c or 3.14 per cent to $8.65.
The property sector was weaker, with Kiwi falling 4c or 4.4 per cent to 87c; Goodman Trust down 5c or 2.37 per cent to $2.06; Argosy declining 3.5c or 3.06 per cent to $1.11; and Investore shedding 4c or 2.68 per cent to $1.45.
Channel Infrastructure, which has just been added to the NZX 50, declined 4c or 2.65 per cent to $1.47; and Restaurant Brands, which has been removed, rose 40c or 6.67 per cent to $6.40.
Other decliners were Tourism Holdings down 7c to $3.99; Scott Technology decreasing 9c or 3.1 per cent to $2.81; Delegat Group shedding 16c or 1.79 per cent to $8.80; NZME giving up 5c or 4.89 per cent to $1.04; and Air New Zealand down 2c or 2.55 per cent to 76.5c.
The medicinal cannabis companies featured on the gainers list, with Cannasouth up 2c or 7.14 per cent to 30c; Rua Bioscience gaining 0.007c or 3.87 per cent to 18.8; and Greenfern Industries increasing 0.006c or 7.06 per cent to 9.1c.
Retailers Michael Hill added 2c or 1.9 per cent to $1.07; Briscoe Group increased 16c or 3.37 per cent to $4.91; and Hallenstein Glasson was up 7c to $5.32.
Other gainers were Rakon increasing 2c or 2.35 per cent to 87c; Tower adding 1.5c or 2.46 per cent to 62.5c; and NZ King Salmon Investments up 1c or 5 per cent 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.
This content was originally published here.
