Market close: Jacinda Ardern’s shock resignation, food prices jolt NZ stocks

The New Zealand sharemarket's five-day winning streak was snapped. Photo / NZME

Prime Minister Jacinda Ardern’s sudden resignation and continuing high food prices jolted the New Zealand sharemarket, snapping a five-day winning streak with a small fall.

The S&P/NZX 50 Index had a choppy session following a weak day on Wall Street and closed at 11,885.64, down 34.76 points or 0.29 per cent – though it bounced back in the last half hour matching session. It was only the third single-day decline for the index this year.

There were 55 gainers and 71 decliners on the main board, with 51.95 million shares worth $91.34 million changing hands.

Greg Smith, head of retail with Devon Funds Management, said the change in a Prime Minister has come as a surprise for the market. “It has created a layer of uncertainty – something markets don’t like – over who will be leading the country over the next 10 months.”

Stats NZ revealed that food prices had their highest annual increase in 32 years, up 1.1 per cent in December and 11.3 per cent for the year. Grocery prices increased 11 per cent, fruit and vegetable prices 23 per cent, and restaurant meals and ready-to-eat food were up 7.8 per cent.

Smith said “inflation is seemingly coming down but there are still some sticky areas remaining such as at the grocery till. The market will be hoping that the December consumer price index, to be released next week, will show some moderation in inflation and give the Reserve Bank some wriggle room when it meets next month.”

On Wall Street, investor sentiment was hurt by the news that Microsoft was laying off 10,000 employees. The Dow Jones Industrial Average fell 1.81 per cent to 33,296.96 points; S&P 500 declined 1.56 per cent to 39028.86; and Nasdaq Composite was down 1.24 per cent to 10,957.01.

Across the Tasman, the S&P/ASX 200 Index was up 0.6 per cent to 7437.6 points at 6pm NZ time and has risen nearly 5.5 per cent so far this year.

At home Fisher and Paykel Healthcare’s strong run stalled, falling 26c to $24.99; but Mainfreight continued onwards with a gain of $1.30 or 1.81 per cent to $72.95.

Ebos Group was down 13c to $45.90; Freightways declined 30c or 3 per cent to $9.70; a2 Milk shed 15c or 1.99 per cent to $7.39; Chorus decreased 10c to $8.25; and Spark gave up 6c to $5.215.

In the energy sector, Meridian was up 6.5c to $5.29; Mercury decreased 7.5c to $5.855; and Contact was down 5c to $7.81.

Other decliners were Accordant Group down 5c or 2.75 per cent to $1.787; Green Cross Health decreasing 4c or 2.96 per cent to $1.31, Vista Group down 3c or 2.01 to $1.46; and Fonterra Shareholders’ Fund shedding 6c or 1.81 per cent to $3.26.

Serko was down 7c or 3.23 per cent to $2.10; NZME declined 4c or 3.39 per cent to $1.14; NZX decreased 6c or 4.55 per cent to $1.26; and Channel Infrastructure was down 3c or 2.07 to $1.42.

Auckland International Airport gained 7c to $8.36; Restaurant Brands added 10c to $5.92; Seeka increased 10c or 2.99 per cent to $3.45; Gentrack collected 6c or 2.31 per cent to $2.66; and Carbon Fund was up 5c or 2.49 per cent to $2.06.

Michael Hill International gained 1c to $1.24 after reporting an 11.7 per cent increase in group sales to A$363.3m ($349.39m) for the first half ending January 1 compared with the previous corresponding period.

The jewellery retailer is estimating first-half operating earnings (ebit) of $52m-$55m compared with the previous $51.6m, and is maintaining strong margins.

Automation specialist Scott Technology rose 20c or 7.84 per cent to $2.75 after announcing further international contracts – making two poultry trussing machines for retail giant Costco Wholesale, with eight more to come; and a materials handling system for James Hardie Industries.

Hospitality group Savor increased 3c or 7.59 per cent to 42.5c after reporting strong trading through November and December, with record revenue of $6.8m last month. Savor is expecting operating earnings of $5m-$6m for the 12 months ending March, up from $1.8m in the previous year.

Smartpay Holdings was up 4c or 3.15 per cent to $1.31 on a 60 per cent increase in consolidated revenue of $21.5m for the three months ending December. The Australian transactional revenue rose 85 per cent to $16.83m.

High-tech manufacturer Rakon, up 4 or 3.96 per cent to $1.05, told shareholders in a newsletter that it has nearly finished its world-class manufacturing facility in Bangalore, India.

Cancer diagnostics company Pacific Edge, down 2c or 3.85 per cent to 50c, told the market that test volumes increased 36 per cent to 7768 in the December quarter.

AoFrio (formerly Wellington Drive Technologies), unchanged at 11.8c, reported record annual revenue of $74.3 for the 2022 financial year. Revenue for the three months ending December was $24.3m, up 16 per cent, and invoicing last month was a record $10.7m.