NZ sharemarket falls to six-month low - Market close

The Warehouse, decreasing 3c or 2.48 per cent to $1.18, was one of three stocks to hit new all-time lows.

The New Zealand sharemarket plunged to its lowest level in six months as the weak economy continues to dampen investors’ appetite.

After a steady morning, the S&P/NZX 50 Index fell sharply in the afternoon and closed at 11,525.88, down 92.21 points or 0.79 per cent.

The index has already fallen nearly 2 per cent this week and is down 2.14 per cent for the year to date. The previous lowest level was 11,475.77 points on December 13.

Matt Goodson, managing director of Salt Funds Management, said following The Warehouse, Tourism Holdings and Fletcher Building earnings downgrades, investors now have a real aversion to stocks with a large exposure to the New Zealand economy.

“There is a very clear concern – some may say it’s a bit late – about domestic-driven earnings in the short term. The market is supposed to be forward-looking but at the moment it is reacting to very weak evidence about the economy.

“The market is soggy across the board,” Goodson said. “They say it’s always darkest before the dawn and maybe the market is reaching its bottom - but it needs inflation lower so the Reserve Bank can start cutting interest rates.”

The latest data showed annual growth in card spending slowed to 2.5 per cent in April, continuing the trend since the border reopened following the Covid lockdown.

ANZ said durables and clothing continued to lag and pressure is mounting on consumers’ discretionary spending. The impetus from tourism-related spending was starting to wane, and miscellaneous services was the only category gaining momentum.

In the United States, the producer price index was higher than expected, up 0.5 per cent in April and 2.2 per cent for the past year. Economists expected 0.3 per cent. But the March gain of 0.2 per cent was revised to a decline of 0.1 per cent, easing concern about stubbornly high prices.

US Federal Reserve chair Jerome Powell reiterated that patience was needed on the timing of interest rate cuts.

This didn’t stop the Nasdaq Composite reaching an all-time high after gaining 0.75 per cent to 16,511.18 points. The Dow Jones Industrial Average was up 0.32 per cent to 39,558.11 points and S&P 500 gained 0.48 per cent to 5246.68.

At home, Ebos Group declined 25c to $34.75 on trade worth $16.37m after falling out of the MSCI Large Cap Index. The move takes place at the end of the month.

Fletcher Building was down a further 12c or 3.97 per cent to $2.90 – its lowest level since October 2002.

Hitting new all-time lows were KMD Brands, down 2.5c or 5.38 per cent to 44c, The Warehouse, decreasing 3c or 2.48 per cent to $1.18; and PGG Wrightson, declining 8c or 4.85 per cent to $1.57. Delegat Group fell 17c or 3.03 per cent to an eight-year low of $5.44.

Fisher and Paykel Healthcare was down 25c to $28.55; Summerset Group shed 23c or 2.24 per cent to $10.05; Spark fell 11c or 2.56 per cent to $4.18; Meridian Energy eased 6c to $6.01; Scales Corp declined 7c or 2.22 per cent to $3.08; and Smartpay was down 2.5c or 1.91 per cent to $1.285.

Other decliners were Freightways down 11c to $8; Skellerup shedding 9c or 2.33 per cent to $3.78; Manawa Energy decreasing 8c or 1.94 per cent to $4.05; Vulcan Steel easing 19c or 2.59 per cent to $7.15; Michael Hill down 2c or 2.94 per cent to 66c; and Third Age Health giving up 4c or 2.53 per cent to $1.54.

Infratil recovered 16c to $10.50; AFT Pharmaceuticals increased 6c or 2.31 per cent to $2.66; Briscoe Group was up 9c or 2.19 per cent to $4.20; and Marlin Global added 2c or 2.04 per cent to $1.

Pacific Edge gained 0.005c or 5.56 per cent to 9.5c; Steel & Tube improved 3c or 3.03 per cent to $1.02; and PaySauce was up 1.5c or 6.12 per cent to 26c.

Auckland International Airport, down 15c or 1.94 per cent to $7.60, recorded an 8 per cent increase in total passengers to 1.529 million in April compared with the same month last year, with international up 10 per cent to 812,695 and domestic up 5 per cent to 716,307. But total passengers were below 1.69 million in March.

Takeover target Rakon, which provides frequency control and timing solutions, increased 11c or 12.79 per cent to 97c after announcing a $17m contract over three years to supply oscillator subsystems for a new low earth orbit satellite constellation. The company’s largest space contract will provide more than $3m of revenue in the 2025 financial year.