New Zealand’s benchmark equity index had its biggest single-day fall since February, when the market fell 3.3% in reaction to Russia invading Ukraine.

The S&P/NZX 50 Index fell 283 points, or 2.6%, to 10,641.36. Turnover was $193 million.

The S&P 500 fell to a 15-month low overnight with ramped-up fears around inflation and a looming recession at the back of investors' minds. 

Kiwibank said in a note this morning that the S&P 500 was down more than 20% from its January peak and the “brutal” bout of selling had sent stocks on the US index plummeting.

Markets all over the globe are now in bear market territory as they reach lows not hit since the beginning of the pandemic in 2020. A bear market is one that has had dramatic and prolonged price declines.

NZ’s market followed in the S&P 500’s footsteps from the moment it opened this morning and fell by 2%. It continued to be dragged lower as the day went on – by midday, it had dropped 2.6% and by around 3pm, it was down 2.9%.

Nikko Asset Management's portfolio manager Stuart Williams said the market had done badly today because the world was coming to grips with inflation and the inflamed fear had flowed from America’s markets into NZ.

“The layers of concern about inflation are emerging more quickly than the tools that central banks have to deploy and weigh against them,” he said.

“And it's about to come in full force from interest rates as well,” he said.

Welcome to the bear market 

Unsurprisingly, it was more of a question of which stocks managed to get through the day largely unscathed while most shares on the NZ index proceeded to get slammed.

A2 Milk was the hardest hit stock yesterday, having fallen 9% to $4.53 – losing almost a month’s gain in the process. But it was one of the few stocks that did well on the index and was up 1.5% to $4.60 at the end of the day.

Tourism Holdings was up 1.2% to $2.63, after being down yesterday following its announcement of the sudden resignation of the company’s chair, Rob Campbell.

Steel & Tube Holdings was also up 3.2% to $1.28.

An eye-watering 140 stocks fell today, with all sectors from technology to infrastructure feeling the pinch.

Williams said investors needed to “hold their nerve” on days like today, when the market was so low.

Logistics and transport company Mainfreight had one of the biggest plummets of the day after falling 3.6% to $70.20.

Banking stocks like ANZ Bank and Westpac also had their share price sharply pinched after falling 4% to $24.26 and 1.9% to $22.24, respectively.

However, Heartland Group was up 1.1% to $1.88.

Safe-haven stock Spark also fell 3.2% to $4.53 by the end of the day. The company announced earlier today that two new non-executive directors would be added to its board: Sheridan Broadbent from Manawa Energy (formerly Trustpower) and former Ryman Healthcare chief executive Gordon MacLeod joining the ranks.

SkyCity Entertainment was down 0.36% to $2.78, even though the company announced today that it expected normalised earnings before interest, tax, depreciation and amortisation to come in between $135 million and $140m for the year ending June 2022.

Ventia Services announced its chief executive Dean Banks had been appointed to Ventia’s board as managing director. The share price fell 1.8% to $2.67 by the end of the day.

Banks was appointed as the infrastructure group’s chief executive in January 2021 and Ventia’s chairman David Moffatt said his appointment to the company’s board was a natural progression thanks to his “strong leadership and performance” in his time as chief executive.

In the energy sector, Mercury NZ fell 2.7% to $5.36, Meridian Energy dropped 1.8% to $4.43, and Genesis Energy was down 3.1% to $2.50.

NZ bond yields also reached new highs, with the 5-year bond breaking above 4% for the first time since 2014. The 10-year rate, which is often used to help price stocks, hit 4.2%.

Williams said NZ’s 10-year rate was currently around 90 basis points higher than the US rate. 

“This tells you there's a bit of long-term concern about inflation but actually, it’s more about what's happening in the US than what's particularly happening in New Zealand.”

On the cryptocurrency front, crypto continued to collapse. Bitcoin fell to its lowest level since early December 2020, partly fuelled by a crypto lending company freezing customer accounts, which prompted fears the currency was no longer solvent. 

The NZ dollar was trading at 62.59 US cents at 3pm in Wellington, down from 63.24 cents yesterday. The trade-weighted index was at 70.82, from 71.30 yesterday.