Market close: NZ sharemarket hits nine-week low as inflation fears rattle investors

The New Zealand sharemarket fell more than one per cent. Photo / NZME

Inflation fears again rattled the nervous New Zealand sharemarket which hit a nine-week low after falling more than one per cent.

The S&P/NZX 50 Index closed at 12,296.74, down 131.87 points or 1.06 per cent, and reaching levels seen in early March. The index, like it has done all week, climbed in the morning to 12,435.91 points but at lunchtime it followed the Australian ASX market sharply down.

The S&P/ASX 200 Index had fallen 2.02 per cent to 6923.10 points at 5.45pm (NZ time), and that index has lost 1.73 per cent in the last five trading days, though it's still 3.48 per cent above its 52-week high.

The local market is being pushed around on light to steady trading. A total of 51.57 million shares worth $152.63 million changed hands and there were 41 gainers and 95 decliners over the whole market.

Jeremy Sullivan, investment adviser with Hamilton Hindin Greene, said inflation is still the main theme and in post-pandemic trading investors are moving out of growth stocks and into cyclical and more defensive shares.

"Until there is a directive from the US Federal Reserve that it is happy for inflation to run longer – and therefore higher interest rates – the markets will remain on edge," Sullivan said.

"The US is looking at the highest level of inflation since the 1980s – with bond yields at 2 per cent, they want inflation at 3 per cent and it is a good way of eroding debt. If you keep pumping trillions of dollars into the economy, that money goes looking for a home and of course prices go up," he said.

Market leader Fisher and Paykel Healthcare fell 35c to $32.55 on trade worth $34m, representing a fifth of the total day's trading.

Meridian declined 11c or 2.07 per cent to $5.21; Mercury fell 28c or 4.27 per cent to $6.27; Genesis shed 6.5c or 1.88 per cent to $3.385; Mainfreight dropped $1.30 or 1.77 per cent to $72.10; Ryman Healthcare decreased 20c to $14.60; and Skellerup Holdings fell 14c or 2.98 per cent to $4.56.

Auckland International Airport fell 18.5c or 2.46 per cent to $7.335, even though passenger volumes have increased in its terminals because of the transtasman travel bubble. Air New Zealand was down 2c to $1.65.

The banks, weak in the Australian trading, had significant falls. ANZ Banking Group was down 39c to $29.44, and Westpac Banking Corporation declined 24c to $27.06.

Synlait Milk fell 5c or 1.71 per cent to $2.88; its majority shareholder a2 Milk again slid 6c to $5.50; Napier Port was down 8c or 2.4 per cent to $3.26; Sanford declined 6c to $4.52; and Vista Group lost 6c or 2.68 per cent to $2.18.

Utilities investor Infratil slipped 1c to $7.29 after telling the market operating earnings (ebitdaf) increased 7.7 per cent to $398.8m, though it recorded a net loss of $16m for the year ending March. There was $49.2m worth of unrealised energy derivative losses at Trustpower.

Infratil provided robust Ebitdaf guidance of $470m-$520m for the present financial year that excluded Tilt Renewables (being sold) and Pacific Radiology but included its recent purchase QScan. Infratil is paying an increased final dividend of 11.5c a share on June 22.

Ebos Group gained 10c to $31; Delegat Group was up 15c to $14.80; PGG Wrightson increased 4c to $3.37; and Rakon picked up 2c or 2.27 per cent to 90c.

Online travel provider Serko lost its ground from the previous day, falling 45c or 6.72 per cent to $6.25 after reporting a soft, but optimistic, annual result for the year ending March. Operating revenue fell 52 per cent from $25.9m to $12.4m, and the net loss was $29.4m compared with $9.36m in the previous year.

Serko repeated its medium-term goal of reaching $100m in revenue, and its Zeno booking platform is being used by Booking.com business customers in more than 90 countries, with 1300 small and medium-sized businesses joining each weekday.

Kathmandu Holdings has appointed Rip Curl boss Michael Daly as its new group chief executive following the resignation of Xavier Simonet, and its share price edged ahead 1c to $1.60.

Argosy Property declined 4c or 2.58 per cent to $1.51 after providing a solid annual result for the year ending March. Net profit income increased 8.1 per cent to $107.7m; its net profit more than doubled to $241.7m thanks to a $157.7m revaluation gain on its $2 billion portfolio; and its net distributable income rose 13.7 per cent to $67.7m.

Other interest rate-sensitive property companies had a down day. Goodman Property Trust fell 3c to $2.23; Property for Industry was down 4c to $2.815; Stride declined 2c to $2.28; and Investore also slipped 2c to $2.04.