Market close: NZ dollar, stocks continue to fall

The NZ dollar went under 59c against the American greenback, trading at US58.92c. Photo / 123RF

Air New Zealand surprised with an earnings upgrade, rising 7 per cent, but it wasn't enough to stop the New Zealand sharemarket falling more than half a per cent.

The market, awaiting the latest United States Federal Reserve interest rate move, treaded water after a sharp fall at the opening. The S&P/NZX 50 Index closed down 71.48 points or 0.62 per cent to 11,498.95 after reaching an intraday low of 11,483.93.

There 47 gainers and 85 decliners over the whole market and trading was improved with 27.03 million shares worth $93.77 million changing hands.

Greg Smith, head of retail with Devon Funds Management, said there has been a massive amount of selling around the global markets but New Zealand is continuing its theme of doing better and holding up well.

"There are a lot of mixed (economic) messages that investors are dealing with at the moment. The latest is the debate about whether the US Fed will raise rates by 75 basis points or 100 points."

There was another sell-off on Wall Street. The Dow Jones Industrial Average was down 1.01 per cent to 30,706.23 points, and S&P 500 fell 1.13 per cent to 3855.93.

Another benchmark stock Ford fell 12.32 per cent to US$13.09 ($22.23) after it warned supply chain issues would cost an extra US$1 billion in the third quarter.

The US 10 Year Treasury Note yield reached an 11-year high at 3.55 per cent. The oil price continued to fall, trading at US$84 a barrel, and the NZ dollar went under 59c against the American greenback, trading at US58.92c.

The Australian S&P/ASX 200 Index had fallen 1.5 per cent to 6704.1 points at 6pm NZ time; the Hong Kong Hang Seng was down 0.85 per cent to 18,620.86; and the Japanese Nikkei 225 had declined 1.16 per cent to 27,367.37.

At home, Air New Zealand rose 5c or 7.35 per cent to 73c – it reached a low of 54c on June 22 – after telling the market that gross earnings for the first half of the 2023 financial year are expected to be in the range of $200m-$275m. The airline is operating at 70 per cent of the pre-Covid 2019 capacity.

Air NZ reported a net loss of $591m in the year ending June, up from $292m in the previous financial year. The airline did not provide a full-year guidance given the many uncertainties in the trading environment, including the jet fuel price.

Smith said Air NZ's earnings upgrade was a pleasant surprise. "Its forecast outstrips the $198m in the pre-Covid 2019 second half and $217m in 2018. Air NZ has been able to solidify its balance sheet with its capital raising and investment in planes and routes.

"Air New Zealand has been able to leverage this in a competitive sector with other airlines struggling to get their balance sheets in shape. Air NZ's forecast is impressive but there are still volatile parts such as the price of jet fuel," he said.

Amongst the leading stocks, Fisher and Paykel Healthcare was down 31c to $19.27; Auckland International Airport declined 14c or 1.81 per cent to $7.60; Fletcher Building decreased 12c or 2.24 per cent to $5.24; a2 Milk shed 13c or 2.06 per cent to $6.20; and Chorus declined 13.5c or 1.78 per cent to $7.465.

In the energy sector, Meridian decreased 13c or 2.56 per cent; Contact shed 4c to $7.79; Genesis was down 4.5c to $2.98; and Mercury was up 2.5c to $6.095.

Ebos Group increased 58c to $38.75; and Freightways had a strong turnaround, rising 25c or 2.42 per cent to $10.60 after reaching an intraday low of $10.01.

Restaurant Brands fell 22c or 2.69 per cent to $7.95 after hitting a high of $15.83 on December 13 last year.

There was life in the retirement village sector. Arvida rose 5c or 3.47 per cent to $1.49; Oceania Healthcare was up 3c or 3.26 per cent to 95c; but Summerset Group was down 15c to $10.74.

Goodman Property fell 6.5c or 2.98 per cent to $2.115; Vital Healthcare Property was down 7c or 2.59 per cent to $2.63; and Serko declined 11c or 3.09 per cent to $3.45.

Gentrack, down 4c or 2.78 per cent to $1.40, has launched a new customer relationship management software platform for utilities and airports that also involved technology from Salesforce and Amazon Web Services.

Retailers Hallenstein Glasson increased 10c or 1.9 per cent to $5.37; Briscoe was up 6c to $5.44; and The Warehouse gained 4c to $3.45.

Millennium & Copthorne Hotels was up 4c or 1.99 per cent to $2.05; Third Age Heath improved 4c or 1.92 per cent to $2.12; Rakon added 3c or 2.48 per cent to $1.24; Foley Wines gained 3c or 2.16 per cent to $1.42; and My Food Bag was up 4c or 6.25 per cent to 68c.