Market close: NZ sharemarket holds its ground in face of weaker offshore bourses

Sky TV gained 8c or 3.51 per cent to $2.36.

The New Zealand sharemarket held its ground as a bunch of stocks went ex-dividend and offshore bourses were decidedly weaker.

Apart from a lunchtime dip, the S&P/NZX 50 Index traded steadily and closed at 11,426.84, down 0.82 points or 0.01 per cent.

There were 48 gainers and 89 decliners on the main board, with 31.13 million shares worth $157.75 million changing hands.

Paul Robertshawe, chief investment officer with Octagon Asset Management, said the local market was in a bit of a lull but “we have had a big correction through the reporting season and that’s cleared the air. I feel okay about the market”.

“It looks like we are going through one of those phases where good news is bad news. There was a strong purchasing managers index in the US and people are still spending,” Robertshawe said.

The August services data showed prices increased to the highest level since February with the ISM purchasing index jumping from 52.7 to 54.5, above market expectation of 52.5. This stoked fears that the US Federal Reserve will need to raise interest rates one more time.

The Dow Jones Industrial Average was down 0.57 per cent to 34,443.19 points; the S&P 500 declined 0.7 per cent to 4465.48; and the Nasdaq Composite shed 1.06 per cent to 13,872.47.

The Hong Kong Hang Seng Index had fallen 1.14 per cent to 18,240.48 points at 6pm NZT; the Japan Nikkei 225 was down 0.55 per cent to 33,058.68; the Shanghai Composite had declined 0.99 per cent to 3126.8; and the Australian S&P/ASX 200 Index was down 1.17 per cent to 7172.2.

There was some cheery news for the agriculture sector and the national economy with dairy prices ending a four-month slide in the latest Global Dairy Trade auction. Prices overall were up by 2.7 per cent, following the 7.4 per cent fall at the last auction in mid-August.

Whole milk powder prices firmed 5.3 per cent to US$2702 a tonne after falling 10.9 per cent to a five-year low last month. Skim milk powder eased 1.6 per cent to US$2286 a tonne.

At home, Air New Zealand, Contact Energy, Ebos Group, Michael Hill, SkyCity, Sky TV and Steel & Tube all went ex-dividend.

In its report on the June-end reporting season, Forsyth Barr said the period saw the highest proportion of earnings downgrades for at least a decade, which is how long it has had reliable information.

The broker said the downgrades were broad-based but primarily driven by operational expenditure and interest expense, rather than revenues.

“We have been in a downgrade cycle for some time, but what stands out this earnings season is that it has spread from economically sensitive stocks, such as retail and industrials, through to infrastructure. Of the 10 companies with the largest downgrades, four were infrastructure companies,” said Forsyth Barr.

Contact Energy increased 10 cents to $8.20; Air New Zealand was up 1.5c or 1.97 per cent to 77.5c; Sky TV gained 8c or 3.51 per cent to $2.36; SkyCity added 3c to $2; and Steel & Tube improved 4c or 3.51 per cent to $1.18.

Meridian Energy was up 6.5c to $5.30; Skellerup Holdings added 8c or 1.82 per cent to $4.47 following its strong financial result; Napier Port collected 5c or 2.29 per cent to $2.23; Foley Wines gained 3c or 23.46 per cent to $1.25; and Allied Farmers rose 3c or 4.29 per cent to 73c.

Prue Flacks is retiring as chair of the Mercury Energy board at the end of December, and will be replaced by Scott St John, a director since 2017. Mercury’s share price was up 10.5c to $6.225.

Auckland International Airport was down 7c to $8.06. Global investment manager BlackRock increased its stake in the airport from 6.017 per cent to 7.058 per cent as outlined in a substantial product holder notice.

Delegat Group declined 22c or 2.64 per cent to $8.11; Freightways was down 9c to $8.41; a2 Milk shed 6c to $4.69; Winton Land decreased 5c or 2.17 per cent to $2.25; Westpac was down 40c to $22.90; and PGG Wrightson gave up 9c or 2.22 per cent to $3.96.

Michael Hill was down 2.2c or 2.2 per cent to 97c; Vital Healthcare Property Trust declined 6c or 2.75 per cent to $2.12; Hallenstein Glasson shed 16c or 2.62 per cent to $5.94; Smartpay Holdings decreased 3c or 1.85 per cent to $1.59; and MHM Automation fell 4c or 4.04 per cent to 95c.

Vista Group declined 7c or 4.52 per cent to $1.48; Bremworth was down 2c or 4 per cent to 48c; Task Group decreased 1.5c or 3.13 per cent to 46.5c; Just Life Group shed 1.5c or 3.9 per cent to 37c; and Blackpearl slipped 2c or 3.39 per cent to 57c.

Transport technology company Eroad went into a trading halt after announcing it was raising $50m - $11.6m through an institutional placement and $38.4m in a one for 2.06 shareholder entitlement offer at 70c a share. Eroad last traded at $1.39.