Market close: NZ stocks suffer limited damage after Wall Street wipeout

Briscoe Group gained 11c or 2.06 per cent to $5.46 after reporting a solid first half result. Photo / NZME

The more defensive and smaller New Zealand sharemarket had limited damage following the wipeout on Wall Street when inflation came in hotter than expected.

With United States indices having their worst day since June 2020 and the Australian market falling nearly 2.5 per cent, the S&P/NZX 50 Index held firm – and actually rose at the end.

The index did fall at the opening from 11,769.74 to 11,632.51 points but then traded steadily in a reasonably straight line, closing down 104.11 points or 0.89 per cent to 11,658.04.

There was broad-based selling with 104 decliners and 31 gainers over the whole market on volume of 26.86 million share transactions worth $117.51 million.

Investors' hopes of slowing inflation were dashed when the US August consumer price index increased 0.1 per cent after economists predicted a fall of 0.1 per cent. This brought the annual inflate rate to 8.3 per cent instead of the expected 8.1 per cent, but down from 8.5 per cent in July.

The investors are now bracing for the third successive 75 basis points rise in the Federal Reserve's cash rate next week – from a target range of 2.25 to 2.5 per cent to 3 to 3.25 per cent after starting the year at zero.

The Dow Jones Industrial Average plunged 1276 points or 3.94 per cent to 31,104.97, giving back all the gains of the previous four trading days.

The S&P 500 was down 4.32 per cent to 3932.69, and Nasdaq Composite fell 5.16 per cent to 11,633.57 as the big technology stocks – their valuations are hit by interest rate changes - bore the brunt of the selling.

The S&P/ASX 200 Index was down 2.44 per cent to 6838.4 points at 6pm NZ time, while the Hong Kong Hang Seng Index had declined 2.55 per cent to 18,834.63 points and Japan Nikkei 225 had fallen 2.61 per cent to 27,868.7.

Dan Stratful, investment adviser with Forsyth Barr, said there are renewed fears that central banks will need to increase interest rates more aggressively.

"Inflation is still strong out there in the world. We didn't fall as much as the others and we are not a high-growth market like Australia and US with our defensive utility stocks and the like.

"Perhaps local investors are waiting for our latest inflation rate and how the Reserve Bank will react. I think we are in for a volatile few weeks while inflation numbers are released. It's been a tough year for investors, no doubt," Stratful said.

Among the leading stocks, Fisher and Paykel Healthcare was down 30c to $20.22; Auckland International Airport declined 10c to $7.60; Ebos Group decreased 68c to $38.70; Mainfreight shed $1.51 or 2.03 per cent to $73; Spark lost 11.5c or 2.12 per cent to $5.315; and Fletcher Building was down 13c or 2.31 per cent to $5.50.

Among the energy stocks, Contact was down 6c to $7.84; Mercury declined 8c to $5.96; and Meridian was up 7.5c to $5.075.

Synlait slipped 5c to $3.50; Fonterra Shareholders' Fund was also down 5c to $3.40; Delegat Group shed 20c or 1.79 per cent to $11; Restaurant Brands declined 11c to $8.57; and Vista Group fell 5c or 3.13 per cent to $1.55.

Briscoe Group gained 11c or 2.06 per cent to $5.46 after reporting a solid first-half result to the end of July. Briscoe had record sales of $367.94m, up 2.66 per cent, with homeware hitting $228.7m and sporting goods $139.2m. Online sales now make up nearly 19.36 per cent of total sales, and net profit was $45.62m, down 3.88 per cent.

Briscoe is optimistic about finishing the 2023 financial year above its previous annual net profit of $87.91m. It is paying an interim dividend of 12c a share on October 12.

Fellow retailer The Warehouse Group increased 12c to $3.43.

Scott Technology, down 5c to $2.84, has signed a $11.2m deal to deliver a fully-automated lamb processing system to the Silver Fern Farms' Finegand plant in South Otago. The new system has the capacity to process 600 full carcasses an hour.

Other decliners were Vulcan Steel decreasing 14c to $8.53; Tower down 2c or 2.99 per cent to 65c; Move Logistics shedding 5c or 4 per cent to $1.25; and Green Cross Health down 3c or 2.22 per cent to $1.32.

Amongst the gainers, Port of Tauranga increased 9c to $6.69; Skellerup Holdings was up 8c to $5.73; Comvita added 5c to $3.38; and eftpos provider Smartpay improved 3.5c or 5.11 per cent to 72c.

SkyCity Entertainment was up 2c to $2.88. This came after an inquiry found Star's Sydney Casino was unsuitable to hold an operating licence because of money laundering. The casino has been given two weeks to explain why it shouldn't be shut down.