NZ stocks tumble as investors skittish over timing of interest rate cuts - Market close

The market will be closely watching Federal Reserve Board Chair Jerome Powell's speech at Stanford University overnight. Photo / AP

The New Zealand sharemarket tumbled half a per cent as investors became nervous about the timing of interest rate cuts.

The S&P/NZX 50 Index was rescued with a late rise in the matching session and closed at 12,040.49, down 55.35 points or 0.46 per cent after reaching an intraday low of 11,956.92 following big falls on Wall Street.

There were 81 decliners and 61 gainers on the main board with 32.09 million shares worth $115.35 million changing hands.

The markets were jittery following recent strong economic data in the United States, sending the US 10-Year Treasury Note yield to its highest level (4.349 per cent) since the end of November. The NZ 10-Year Government Bond yield was up 3.7 basis points to 4.651 per cent.

Crude oil has risen to a five-month high at US$84.76 a barrel.

The Dow Jones Industrial Average declined 1 per cent to 39,170.24 points and has fallen 1.6 per cent in two trading days; S&P 500 was down 0.72 per cent to 5205.81; and Nasdaq Composite fell 0.95 per cent to 16,240.45.

Mark Lister, investment director with Craigs Investment Partners, said the markets have started this week on the backfoot after a very strong run through the first three months of the year.

“Inflation is still somewhat problematic. The indicators of a strong US economy is a good thing but interest rates may not come down as quickly. It’s a case of good economic news being a headwind for the interest rate and inflation environment.”

Lister said markets were rethinking whether the Federal Reserve would cut rates in June or hold fire till later in the year.

“Fed chair Jerome Powell is speaking at Stanford University overnight and this will be closely followed. The Reserve Bank of New Zealand meets next week and they are expected to continue talking tough,” he said.

Fisher and Paykel Healthcare dragged the local market down, falling 77c or 2.94 per cent to $25.40 after similar stocks were weaker in the US.

Freightways was down 12c to $8.83; Winton Land declined 4c or 1.8 per cent to $2.18; NZME decreased 2c or 2.22 per cent to 88c; Allied Farmers shed 2c or 2.7 per cent to 72c; and Solution Dynamics fell 5c or 3.45 per cent to $1.40.

In the energy sector, Mercury fell 20c or 2.89 per cent to $6.72 and Vector was up 12c or 3.15 per cent to $3.93.

The latest Global Dairy Trade auction saw the index increase 2.8 per cent – its biggest rise in two months and reversing the same fall two weeks ago.

Whole milk powder rose 3.4 per cent to an average of US$3246 per metric tonne, and skim milk powder was up 1.4 per cent US$2550/MT. Cheddar recorded the largest increase of 4.1 per cent to US$4340/MT, with butter up 3.1 per cent to US$6592/MT.

Fonterra Shareholders’ Fund was up 7c or 1.94 per cent to $3.68, while a2 Milk was down 5c to $6.60.

Synlait Milk declined a further 2c or 2.86 per cent to 68c. In moves to strengthen its balance sheet, Synlait is considering a capital raise and is undertaking a strategic review of its North Island assets – the Pokeno processing plant, Auckland blending and canning facility and warehousing which are under-utilised. It is still trying to sell the Christchurch-based Dairyworks.

Hallenstein Glasson was up 11c or 1.74 per cent to $6.44; Skellerup added 10c or 2.22 per cent to $4.60; Vulcan Steel gained 23c or 2.51 per cent to $9.40; Millennium & Copthorne Hotels NZ collected 4c or 2.21 per cent to $1.85; and Arvida Group increased 4c or 3.7 per cent to $1.12.

Stride Property added 5c or 3.85 per cent to $1.35; Carbon Fund was up 7c or 4.32 per cent to $1.69; PaySauce increased 3c or 13.64 per cent to 25c; Eroad rose 7c or 8.75 per cent to 87c; Steel & Tube improved 2c or 1.9 per cent to $1.07; and Blackpearl Group was up 2c or 2.94 per cent to 70c.

Scott Technology, up 2c to $2.86, told the market that John Kippenberger will now be staying on as chief executive till the end of August, supported by Aaron Vanwalleghem, President of Europe and North America.

Argosy Property, gaining 2.5c or 2.22 per cent to $1.15, has sold a property in Forge Way, Auckland for $35.2m, 1.1 per cent above its book value and to be settled in March next year.

Artificial intelligence company Being AI rose 2.5c or 100 per cent to 5c on its second day of trading following the reverse takeover of Ascension Capital. Trading in the company was light with 32 trades worth 72,500.