New Zealand shares edged lower as the two biggest companies - Fisher & Paykel Healthcare and A2 Milk - weighed on the broader index, following Australia lower amid concerns over the latest wave of new covid-19 cases across the Tasman.
The S&P/NZX 50 Index declined 13.8 points, or 0.1 percent, to 11,722.97. Within the index, 32 stocks rose, 16 fell, and two were unchanged. Turnover was $130.3 million.
Australia's S&P/ASX 200 Index was down 1.5 per cent in late trading as a record number of new cases in Victoria and growing numbers in New South Wales kept investors nervous across the Tasman.
A2 and F&P Healthcare - which both have secondary listings on the ASX - followed suit, which dragged down the NZX 50, given their importance to the index. The kiwi dollar at a six-month high added to the negative outlook for the two export companies.
F&P Healthcare dropped 2 per cent to $35.99 and A2 Milk fell 1.3 per cent to $20.93.
"They are leading the index down," said Peter McIntyre, an investment advisor at Craigs Investment Partners. The two stocks account for almost 30 per cent of the index, meaning the NZX 50 tends to follow them.
The trans-Tasman equity markets missed out on a rally across Asia as investors were cheered by a stimulus package agreed by the European Union to mitigate the economic impact of covid-19.
Z Energy rose 5.1 per cent to $2.89, the day's biggest gain.
McIntyre said the "jaw dropping large" stimulus package in Europe had flowed through to Asian markets, because Europe was a key trading partner.
Much of the NZX 50's recovery in the June quarter was driven by just a handful of stocks, and only 12 out of the 50 have made year-to-date gains. It is a similar story in the US, where the S&P 500 Index turned positive for the year, yet most companies have missed out the rally.
Restaurant Brands New Zealand posted the day's biggest decline, dropping 2.5 per cent to $11.73.
Meridian Energy fell 1.1 per cent to $4.72. It said today national electricity demand in June was 1.1 per cent lower than in the same month a year earlier. Genesis Energy declined 1.3 per cent to $2.99, Mercury Energy fell 0.6 per cent to $4.72, and Contact Energy slipped 0.5 per cent to $5.73.
Z Energy rose 5.1 per cent to $2.89, the day's biggest gain, after it gave a first quarter update warning of low first-half operating earnings but in line with expectations.
McIntyre said the key point for Z was that it gained market share through its reduced price strategy, although margins shrank materially.
"On balance, it is a positive update with better than expected retail volumes and that cost out programme working well for them," he said.
New Zealand Refining Company rose 1.5 per cent to 68 cents. It said it had "detailed planning" underway to simplify the refinery and to evaluate becoming an import terminal.
Z Energy, a cornerstone shareholder of the refinery operator, would benefit from the ability to import cheaply refined oil the way its competitors do.
Global dairy prices held up in the overnight auction as some buyers jostled to shore up supply against a backdrop of rising covid-19 cases in key markets
Fonterra Shareholders' Fund units fell 0.8 per cent to $3.85 and Synlait Milk rose 1 per cent to $7.12.
Retirement village operator Summerset Group Holdings rose 4.2 per cent to $7.89, Ryman Healthcare gained 1.7 per cent at $13.58 and Oceania Healthcare was up 1 per cent to $1.03.
Goodman Property Trust told unitholders it would probably offer a new retail bond to replace a $100 million bond maturity in December to keep its bank funding available for other uses. The units rose 0.9 per cent to $2.19 today.
Tech stocks were stronger. Vista Group International rose 2.4 per cent to $1.30, and Pushpay Holdings increased 1.8 per cent to $7.95. Broadband network operator Chorus advanced 1.8 per cent to $7.44 and telecommunications retailer Spark New Zealand was up 1.5 per cent at $4.91.
Outside the benchmark, Briscoe Group shares bounced 7 cents, or 2.1 per cent, to $3.37 on advice that the retailer's half year results to end July "may be closer to last year" than expected on the back of unexpected strength in sales, combined with cost saving measures.
