New Zealand’s market finished its first week of trading in 2023 by edging down, losing some of its new year cheer and gains that it saw during the rest of the week.

The S&P/NZX 50 index fell 25.3 points, or 0.2%, to 11,625.97. Turnover was a very light $66.5 million.

In an Australia and NZ equity research report, Morningstar analysts Jacqueline Moody, Adrian Atkins and Peter Warnes wrote that while markets faced “intensifying headwinds”, a wide range of ANZ stocks was already undervalued. 

Atkins said that Australian and NZ stocks covered by Morningstar were trading 7% below fair value on average – and this was compared to a 15% discount at the June and October market lows. 

“At those lows, the market was cheaper than it had been in more than a decade except for the covid-19 selloff and global financial crisis,” he wrote.

Atkins also said that profitability for airlines like NZ’s Air NZ and Australia’s Qantas was elevated as air travel demand outstrips supply.

“We think elevated profits are sustainable in the medium term, but longer-term will be more challenging as supply lifts, and neither stock looks particularly cheap,” he said.

Today, Air NZ was down 0.7% to 76 cents while Auckland International Airport edged up 0.5% to $8.10.

Across the local market, companies still appeared to be enjoying the summer holidays, with only Vital Healthcare Property Trust making a small splash on the corporate news front.

The listed hospital developer told the market that it was planning to enhance its portfolio by “strategically recycling capital” as it braced itself for $65m in property revaluation losses for the six months ended Dec 31.

This included selling up to $200m of its existing non-core assets, with the net sale proceeds being initially used to repay and reduce Vital’s debt by up to 2.5%.

Shares in the trust were up 2.9% to $2.32 by early evening.

Aged care provider Ryman Healthcare was up 2.6% to $5.64, the only retirement home operator to be in the green today. Radius Residential Care fell 5.1% to 28 cents – in very light trading – while Arvida Group was down 1.4% to $1.13 and Summerset Group edged down slightly by 0.1% to $9.29.

Oceania Healthcare shares were flat at 79 cents each.

Rural services firm PGG Wrightson was up 2% to $4.54 and casino operator SkyCity Entertainment Group also rose 2.1% to $2.49.

Property stocks also saw some small lifts today, with Argosy Property up 1.3% to $1.165, Kiwi Property Group rising 1.1% to 91.5 cents and Investore Property edging up 1.4% to $1.50.

Cancer diagnostics company Pacific Edge fell 3.9% to 50 cents. Retailer The Warehouse lost some of yesterday’s gains after falling 2.6% to $2.65.

Healthcare manufacturer and index heavyweight Fisher & Paykel Healthcare fell 1.7% to $23.11 by early evening.

Today, the NZ dollar was trading at 62.44 US cents at 3pm in Wellington, slipping down from 63.02 cents yesterday.

On Wednesday, minutes from the US Federal Reserve’s December policy meeting showed that the central bank believed that an “unwarranted” easing in financial conditions would “complicate the Committee’s effort to restore price stability”. 

In short: the Fed isn’t keen on markets rallying at the moment due to concerns that inflationary consumer spending could flare up again and force the bank to carry on hiking interest rates for longer.