Market close: Big falls among leading stocks drags market lower

Meridian Energy decreased 11 cents or 2.05 per cent to $5.25. Photo / NZME

The New Zealand sharemarket opened a crucial week for the economy with a fall of more than half a per cent, punctured by some unusually large downward moves in some leading stocks.

With the Australian market closed for King’s Birthday weekend, the S&P/NZX 50 Index was uninspired and closed at 11,615.55, down 74.79 points or 0.64 per cent.

There were 47 gainers and 82 decliners over the whole market on volumes of 24.1 million share transactions worth $114.63 million. Infratil, up 1 cent to $9.86, led the individual trading list with $33.9 million worth of shares changing hands.

“The market felt very light with Aussie closed and some of the moves looked a bit over-sized, to me. It wasn’t a good guide for the rest of the week,” Paul Robertshawe, chief investment officer for Octagon Asset Management, said.

Retail (electronic card) spending declined $113m or 1.7 per cent in May compared with April - the first monthly fall since February. Westpac said the spending was weaker than expected and reinforced expectations for a downturn in domestic economic conditions over the coming months.

The market will now be closely watching the March quarter gross domestic product (GDP) on Thursday and whether New Zealand is in a technical recession, following a 0.6 per cent contraction in the economy in the December quarter.

Some economists are predicting that the country may just squeeze out with 0.2 per cent GDP growth in the March quarter, and the Reserve Bank has forecast 0.3 per cent.

The United States Federal Reserve is meeting this week and there’s a 70 per cent consensus amongst analysts that interest rate rises will pause as inflation begins to fall. Whatever, the Fed will set the tone for global markets.

Greg Smith, head of retail with Devon Funds Management, said the Federal Reserve decision will be a close call. If it did pause, it would be the first time in 18 months.

“It will be significant particularly given that where the Fed goes, many other central banks tend to follow. We will get a sighter with US CPI numbers out before the Fed meets,” Smith said.

Freightways fell 34c or 3.89 per cent to $8.41; a2 Milk declined 18c or 3.14 per cent to $5.56; and Auckland International Airport was down 25c or 2.86 per cent to $8.50 following the Auckland Council’s decision to sell down its 18 per cent shareholding to 11.1 per cent.

Robertshawe said a report speculated that if the stake was sold as a whole then there would be a takeover bid for the airport company.

“I think that’s a bit misguided. It’s a very hard asset to take over and the Overseas Investment Office would have something to say about that. It could only happen with a local bidder. I expect the council shareholding will be sold through a placement,” he said.

Robertshawe said he found the a2 Milk fall perplexing as the data coming out of China in terms of market share is positive and their SAMR licence is very important.

Mainfreight was down 77c to $69.23; Meridian Energy decreased 11c or 2.05 per cent to $5.25; Ebos Group gave up 25c to $35.60; Skellerup Holdings declined 11c or 2.39 per cent to $4.49; Summerset Group shed 9c to $8.90; and Restaurant Brands was down 15c or 2.23 per cent to $6.58.

Retailers Hallenstein Glasson declined 13c or 2.16 per cent to $5.90; Briscoe Group was down 10c or 2.3 per cent to $4.25; The Warehouse Group decreased 4c or 2.38 per cent to $1.64; and Michael Hill was up 3c or 3.13 per cent to 99c.

Chorus was down 18c or 2.12 per cent to $8.30; South Port New Zealand fell 44c or 5.66 per cent to $7.33; Eroad gave up 5c or 6.17 per cent to 76c; Seeka shed 6c or 2.26 per cent to $2.59; and Sky TV declined 4c to $2.53.

Move Logistics decreased 3c or 3.26 per cent to 89c; Task Group was down 2c or 4 per cent to 48c; and New Zealand Rural Land Co declined 3c or 3.33 per cent to 87c.

Serko rose 19c or 5.49 per cent to $3.65; Contact Energy was up 12c to $7.94; Port of Tauranga collected 9c to $6.21; Gentrack gained 8c or 1.9 per cent to $4.28; and Green Cross Health improved 4c or 2.86 per cent to $1.44.

PGG Wrightson was up 10c or 2.5 per cent to $4.10; NZ Automotive Investments increased 1.5c or 5.66 per cent to 28c; and T&G Global added 3c to $2.04.

WasteCo, last trading at 7.5c, went into a trading halt while it makes a placement with selected wholesale investors at 6.5c a share. WasteCo will soon announce a share purchase plan to enable existing shareholders to also participate in funding further growth.

Correction: This story has been updated to correct the specifics of Auckland Council’s decision to sell down its stake in Auckland International Airport.