Reserve Bank governor Adrian Orr. Photo / Mark Mitchell
Keeping you up to date with the latest market moves, in association with Investment firm Jarden
New Zealand
New Zealand markets fell on Tuesday, in line with global markets as the S&P/NZX 50 lost 1.0 per cent to 13,200.0 points.
No sectors posted gains during the day's trading, with the greatest declines coming from healthcare and technology, sliding 2.4 and 1.6 per cent by the close.
Auckland International Airport led the way with a strong performance to close 2.9 per cent higher. Investment flows were likely linked to a looming portfolio rebalance of the S&P Global Infrastructure Index. Furthermore, on Monday it was announced that Carrie Hurihanganui would take over as CEO of the company, leaving her role as Chief Operating Officer at Air New Zealand.
Similarly, the a2 Milk Company extended gains of 1.6 per cent against the run of play – although news broke after market close that Australian law firm Slater and Gordon filed a class action law suit against the company on behalf of investors. The law firm claims that a2 Milk engaged in misleading or deceptive conduct, and breached continuous disclosure rules by posting four consecutive downgrades from September 2020 to May 2021.
Weighing down index performance was yesterday's single stock loser, Fisher & Paykel Healthcare (FPH), which lost 3.3 per cent. Joining FPH were retailer Kathmandu and retirement village operator Oceania Healthcare, falling by 3.1 and 2.7 per cent, respectively.
All eyes will be on the Reserve Bank of New Zealand (RBNZ) announcement today, where it is widely expected to lift the Official Cash Rate by 25 basis points to 0.5 per cent. Most economists had expected the RBNZ to make this increase in August, which did not occur, with New Zealand moved to Covid-19 Alert Level 4 shortly before the decision.
International
US
US markets rebounded from yesterday's rout, with the S&P 500 increasing 1.4 per cent, the Dow Jones Industrial Average (DJIA) rising 1.2 per cent, and the NASDAQ trading 1.5 per cent higher this morning.
Real estate (-0.6 per cent) and utilities (-0.1 per cent) were the only two sectors underperforming at the time of writing. All other sectors traded in the green, with financials (+2.0 per cent) and technology (+1.9 per cent) booking the biggest gains.
The best performer on the S&P 500 was medical device provider Abiomed, rising 6.1 per cent. Next in line was independent investment management company Invesco, up 5.9 per cent. Rounding out the leader board was Netflix, increasing 4.9 per cent, hitting a 52-week high.
Real estate investment trust Ventas was heading the top decliners, decreasing 3.6 per cent. Gaming and racing property owner Penn National Gaming also underperformed, declining by 3.0 per cent, followed by digital infrastructure company Equinix, down 2.9 per cent.
Tesla (-0.7 per cent) must pay US$137 million to a former employee, who sued the electric car maker for compensation based on a hostile work environment and racial abuse. According to the lawyers, the case was only able to move forward because the worker had not signed one of Tesla's mandatory arbitration agreements. Such agreements are used to force employees to solve disputes in private and not in a public trial.
Facebook (+2.0 per cent) recovered some of the losses made in Monday's session, where the share price dropped almost 5.0 per cent. The company faced its biggest outage since 2008, due to configuration changes made on its routers.
Rest of the world
The major Asian indices were a mixed bag overnight. The Nikkei dropped 2.2 per cent, the Hang Seng recovered by 0.3 per cent, while mainland Chinese exchanges were still closed due to Golden Week.
New Japanese Prime Minister Fumio Kishida's has reaffirmed close ties with the US, agreeing to cooperate in taking a more activerole in China-Taiwan relations.
Commodities
Gold slightly decreased, down 0.4 per cent to US$1,760.50 per ounce.
Oil continued its upward trend, increasing a further 2.0 per cent to US$79.11 per barrel.
Cryptocurrencies performed well this morning, with Bitcoin trading 1.9 per cent higher and Ethereum up 0.6 per cent.
The US 10-year treasury rate was yielding 1.522 per cent, at the time of writing.
Australia
The ASX 200 fell 0.4 per cent yesterday, led downwards by academic and educational services and technology, losing 3.9 and 1.6 per cent, respectively. The tech sector's movements followed the US tech selloff on Monday night.
Later in the session the Reserve Bank of Australia monthly Monetary Policy Decision was released. In line with market expectation, highly supportive monetary conditions will be maintained with the cash rate held at 0.1 per cent and purchase of government securities maintained at A$4.0 billion a week until at least February 2022. The target of 0.1 per cent for the April 2024 Australian Government Bond will be maintained. The statement included acknowledgement of the Delta outbreak's impact on the economy and the setback in economic recovery. The effect of restrictions on the labour market was also highlighted.
Sealink Travel Group declined 6.3 per cent, furthering the 5.4 per cent decline on Monday.
Meanwhile, artificial intelligence company Appen fell 5.0 per cent. The business has Facebook as a key customer, and may have been sold off on the back of the Facebook decline.
Afterpay declined by 5.0 per cent, another technology stock likely hurt by the US technology sell-off overnight.
Energy and utilities sectors pushed upwards, gaining 2.3 and 0.7 per cent, respectively.
Gold Road Resources rose 7.2 per cent despite downgrading the forecast for annual production this week. Rising gold prices, and bearish investors may have offset the impact to sentiment. Meanwhile, Silver Lake Resources rose 5.7 per cent in line with the industry move.
Online marketplace Redbubble continued to be volatile, rebounding by 7.2 per cent and recovering from the 4.1 per cent decline on Monday.
• For more information on the latest market moves, get in touch with Jarden.
Disclaimer: This Morning Brief has been prepared in good faith and reflects opinions and views at the time of publication, using external sources, systems and other data and information we believe to be accurate, complete and reliable at the time of preparation. We make no representation or warranty as to the accuracy, correctness and completeness of that information, and will not be liable or responsible for any error or omission. This Morning Brief is not to be relied upon as a basis for making any investment decision. Please seek specific investment advice before making any investment decision. Jarden Securities Limited is an NZX Firm, a broker disclosure statement is available free of charge at www.jarden.co.nz. Jarden is not a registered bank in New Zealand. Full disclaimer available at: https://www.jarden.co.nz/limitations-and-disclaimera>
Around 18,500 public servants received a pay rise in the quarter.