Market close: NZ sharemarket's stellar run comes to a halt

The New Zealand sharemarket fell 0.97 per cent - its first fall in nine days. Photo / NZME

The stellar run by the New Zealand sharemarket came to a crushing halt, falling nearly 1 per cent, as investors became concerned that the Delta Covid outbreaks may slow economic growth.

The S&P/NZX 50 Index slid from a morning high of 13,324.92 to close at 13,193.01, down 128.98 points or 0.97 per cent – its first fall in nine days.

There were 57 gainers and 82 decliners over the whole market on trade of 48.28 million share transactions worth $197.84 million.

Matt Goodson, managing director of Salt Funds Management, said slowing economic growth and rising inflation can be a tricky combination.

"Bond yields have again gone up because of the inflationary pressures everywhere. The US Federal Reserve has suggested the pressures are temporary but the inflationary drivers look like being permanent.

"With our inflation at or over the Reserve Bank's top-end target of 3 per cent and bond yields nearing 2 per cent, no one is going to get rich out of that," said Goodson.

"There is now a bit of caution on the market and after having such a strong month it was overdue for a sell-off."

The New Zealand 10 Year Government Bond yield increased to 1.938 per cent, heightening the prospect of the Reserve Bank lifting the official cash rate next month.

The higher bond yield hit the interest rate-sensitive property stocks. Argosy fell 5.5c or 3.2 per cent to $1.665; Property for Industry and Goodman Property Trust both shed 3.5c to $2.99 and $2.53 respectively; Kiwi Property was down 1.5c to $1.155; and Precinct Properties slipped 1c to $1.705.

But Vital Healthcare Property Trust increased 4.7c to $3.205, and Stride was up 1c to $2.66.

The leading retirement village operators were weaker, Ryman Healthcare declining 50c or 3.2 per cent to $15.11 and Summerset Group Holdings falling 26c to $15.14.

Market leader Fisher and Paykel Healthcare was down 87c or 2.57 per cent to $33; Mainfreight shed 90c to $94.20; Ebos Group declined 23c to $34.77; Contact Energy decreased 5c to $8.04; Infratil lost 10.5c to $7.445; and beleaguered a2 Milk fell 18c or 3.04 per cent to $5.75.

Synlait Milk told the market it was reorganising its business around three key units, nutritionals, ingredients and liquids, resulting in a 15 per cent reduction in staff and annual savings of $10-$12m. Synlait's share price was down 1c to $3.16.

Goodson said Synlait's move is "commentary that times are fairly tough. It has considerable bank debt and has had a couple of banking covenants waivers."

Fletcher Building was down 1c to $7.47 as four of its factories in Auckland fired up to supply much-needed products to construction sites around the country.

Other blue chips remained strong. Auckland International Airport was up 6c to $7.39; Meridian gained 3c to $5.17; Mercury also increased 3c to $6.68; and Vector rose 8.5c or 2.06 per cent to $4.22. Delegat Group increased 19c to $14.79.

DGL Group climbed 11c or 4.09 per cent to $2.80; Seeka rose 12c or 2.25 per cent to $5.46; AFT Pharmaceuticals increased 14c or 3.39 per cent to $4.27; Briscoe Group was up 8c to $6.89; Accordant Group picked up 7c or 4.32 per cent to $1.69; and Green Cross Health gained 6c or 5.36 per cent to $1.18.

Carpet maker Bremworth continued its strong rally, rising a further 6c or 7.69 per cent to 84c. Sky Network Television slowed, falling another 0.005c or 2.38 per cent to 20.5c.

Pacific Edge fell 4c or 2.68 per cent to $1.45 after dismissing market speculation that it is planning a capital raise. Instead, the cancer diagnostic firm said it is focusing on its dual listing on the Australian Stock Exchange.

Goodson said it was a strange company release amidst some confusion. "Someone must have ticked the wrong box – one of the listing questions is 'do you intend to raise capital' – and this was enough to spook the market and send Pacific Edge's share price down."

Marsden Maritime Holdings fell 13c or 1.99 per cent to $6.41; Port of Tauranga declined 10c to $7.10; Serko shed 25c or 3.03 per cent to $8; Vista Group decreased 4c to $2.39; Harmoney lost 6c or 2.84 per cent to $2.05; and Move Logistics was down 7c or 4.07 per cent to $1.65.

Overnight on Wall Street, Rocket Lab rose another 98c or 7.25 per cent to US$14.50 ($20.40) and all eyes are on its latest earnings report and outlook.