It’s been a long week in the investment world as international markets struggled against rising interest rates and inflation fears which seeped through to drag down New Zealand’s benchmark index for another day – just as the kiwi dollar reached a two-year low.
It looked like the market was turning positive earlier this afternoon, thanks to big stocks like Ryman Healthcare and Fisher and Paykel Healthcare having a good day, but it still stumbled into the end of the week in the negative.
The S&P/NZX 50 index fell 9.1 points, or 0.08%, to 11,168.18. Within the broader equity market, 76 stocks fell and only 60 rose. Turnover was $146.8 million.
Grant Davies, an investment adviser at Hamilton Hindin Greene, said it had been an “interesting week all round” for the markets and NZ’s market turning positive earlier in the afternoon had been following Asian markets.
He said the NZ dollar had “definitely been drifting off” and fears of New Zealand’s economy weakening had impacted the market’s weakness today.
“The US dollar has been the currency that's been very strong,” he said. “And the strength of that dollar is pushing it up in NZ.”
He said the aged care sector had a “better day today”, which was why the index hadn’t fallen by much by the close.
Ryman Healthcare was also up 1.5% to $9.39, while Oceania Healthcare was up 2.1% to 99 cents.
Air New Zealand shares were down 1.4% to 70 cents.
Dairy companies were also down today. Synlait Milk was down 4.6% to $3.11 and A2 Milk 2% to $4.45.
“It doesn’t take much for Synlait Milk and A2 Milk to have a bad day these days,” Davies said, referring to the current geopolitical turmoil that's affecting the dairy market.
But he said there was “lots of chatter” in the US around baby formula shortages, which the two companies could possibly be in a position to benefit from.
“It just goes to show that there's still plenty of demand for the product out there. It's just getting it to the right place at the right time,” he said.
Health manufacturer Fisher & Paykel Healthcare was up 3.4% to $21.05 and had a good day because when the greenback is high, Fisher & Paykel Healthcare’s share price generally follows.
The Warehouse Group was up 7.6% to $3.39 after announcing its third-quarter sales today, which showed a 2.5% slide in revenue from a year earlier to $771.6 million.
Chief executive Nick Grayston said in the company’s update that The Warehouse was “seriously considering” jumping into the grocery market after the retailer’s first time trying to get into the sector in 2006 failed.
Davies said The Warehouse’s three-quarter update was “solid” but the retailer was still facing the “same old issues”.
“They’re facing challenges due to high inflation and shipping delays and covid-19 – all the same boxes that everyone's having to deal with – but The Warehouse is doing well enough to obviously see the share price bounce a little bit today.”
Technology providers like Spark and Chorus rose 1.3% to $4.90 and 0.78% to $7.105 respectively.
Fletcher Building was down 0.51% to $5.88.
The biggest losses in today’s market were Wellington Drive Technologies, which fell 8.1% to 12.5 cents, chemical distributor company DGL, which was down 2% to $3.14, and technology company Rakon, which fell 4.9% to $1.54.
Tina Teng, a markets analyst at CMC Markets said in an afternoon note that the S&P 500 was “falling toward a bear market” thanks to its prolonged price declines.
She said this was due to the Dow Jones Industrial Average declining for the sixth trading day in a row and the Nasdaq – the tech stock market giant – failing an “early rebounding attempt”.
Teng said the US dollar index had hit a 20-year high today, coinciding with the Kiwi and Aussie hitting a two-year low.
The NZ dollar was trading at 62.53 US cents at 3pm in Wellington, up from 63.39 cents yesterday.
