Market close: NZ shares fall, global markets battered as economic uncertainty intensifies

Overall world shares have fallen 12.5 per cent this year. Photo / AP

The New Zealand sharemarket fell another 1 per cent and more as the economic uncertainty intensifies with surging oil and food prices, runaway inflation and the continuing war in Ukraine.

The S&P/NZX 50 Index was down 168.32 points or 1.41 per cent to 11,744.95 highlighted by 115 decliners and 31 gainers on volume of 47.87 million share transactions worth $173.22 million.

Mark Lister, head of private wealth research with Craigs Investment Partners, said the New Zealand market – down just over 10 per cent for the year – is holding up better than most.

"Europe is getting belted with some of their markets down 16-17 per cent, the Nasdaq Composite is down 20 per cent, and overall world shares have fallen 12.5 per cent so far this year. A 10 per cent decline is not a major issue as we see that regularly over time," Lister said.

"The question is: Where does the volatility end? We don't have the answer. The impact of high inflation and interest rates, with a war thrown into the mix even though it is isolated, creates so much uncertainty.

"What the market doesn't know is whether this bout of uncertainty will change the approach of the central banks in dealing with inflation," said Lister.

The latest United States inflation rate will be released on Friday morning (NZ time) and it is expected to reach 7.8 per cent. ANZ Research is now predicting New Zealand inflation to hit 7.4 per cent in the second quarter ending June – above the Reserve Bank's forecast of a 6.6 per peak in the first quarter ending March.

ANZ expects house prices to fall 10 per cent this year but it is predicting back-to-back official cash rate (OCR) hikes of 50 basis points in April and May, with the OCR reaching 3.5 per cent in April next year.

Overnight, the Dow Jones Industrial Average – falling nearly 800 points or 2.37 per cent to 32,817.38 – joined the S&P 500 Index and Nasdaq Composite in correction territory. The S&P 500 had its biggest single-day fall since October 20 when it fell 2.95 per cent to 4201.09 points. The Nasdaq was down 480 points or 3.62 per cent to 12,830.96 and is now a bear market by declining 20 per cent from its November high.

Crude oil raced to US$130 a barrel overnight – its highest level since 2008 – but the price settled at just over US$119 a barrel (at 6pm NZ time).

At home, the solid and predictable blue chip stocks can't escape the economic uncertainty. Fisher and Paykel Healthcare was a down a further 45c to $26.45; Mainfreight shed $1.47 or 1.88 per cent to $76.68; Infratil declined 17c or 2.08 per cent to $8.02; and Skellerup Holdings fell 38c or 6.56 per cent to $5.41.

Fletcher Building was down 12c or 1.85 per cent to $6.35; Summerset Group Holdings plunged 42c or 3.56 per cent to $11.38; Ryman Healthcare shed 22c or 2.31 per cent to $9.32; Synlait Milk declined 10c or 3.04 per cent to $3.19; and Napier Port decreased 10c or 3.28 per cent to $2.95.

Wine exporter Delegate Group was down 46c or 3.44 per cent to $12.91; Heartland Group Holdings declined 12c or 5.45 per cent to $2.08; T&G Global shed 7c or 2.42 per cent to $2.82; and Steel & Tube decreased 6c or 3.82 per cent to $1.51.

The travel and leisure stocks were hit. Auckland International Airport declined 21c or 2.94 per cent to $6.99; Air New Zealand dropped 9.5c or 6.48 per cent to $1.37; Serko shed 6c to $4.34; Tourism Holdings was down 8c or 3.09 per cent to $2.51; and SkyCity Entertainment was down 10c or 3.46 per cent to $2.79.

Among the retailers, Briscoe Group was down 15c or 2.56 per cent to $5.72, Michael Hill International fell 12c or 8.45 per cent to $1.30; and Hallenstein Glasson decreased 8c to $5.84.

Precinct Properties declined 4c or 2.56per cent to $1.52; Pacific Edge fell another 3c or 3.41 per cent to 85c – its lowest level since December 7, 2020 – Rakon was down 8c or 4.68 per cent to $1.63; AFT Pharmaceuticals decreased 11c or 2.93per cent to $3.64; and Move Logistics shed 13c or 9.7 per cent to $1.21.

Transport and logistics software firm TradeWindow, down 8c or 4 per cent to $1.92, is partnering with Vero to provide marine insurance certificates in digital format, cutting out courier charges.

Chatham Rock Phosphate was the day's biggest mover, rising 6c or 27.27 per cent to 28c; New Zealand Oil & Gas increased 2.5c or 4.85 per cent to 54; Vulcan Steel gained 12c to $9.57; and My Food Bag rebounded 6c or 6.52 per cent to 98c.