Markets recover after steep drop
GLOBAL share markets have calmed and recovered some of Wednesday’s bloody losses, which included the Nasdaq in New York suffering an official ‘‘correction’’ — having lost 10% of its value over several weeks.
At trading close in the US on Thursday (US time), The Dow Jones Industrial Average rose 1.53%, the S&P gained 1.77%, and the Nasdaq Composite added 2.76%.
The ASX bled red throughout Thursday (NZ time), losing about 3% to close at its lowest point since October last year. The NZX closed down almost 1%.
Craigs Investment Partners broker Chris Timms said the NZX’s trading on Thursday opened sharply lower, but managed to climb off its worst levels during the afternoon, closing 0.86% down.
‘‘This followed aa sharp selloff on Wall St during the previous session, which saw the Dow Jones and S&P500 erase their gains for the year, and the Nasdaq Composite enter correction territory.’’
He said the NZX was down 8.37% for October and was ‘‘on track’’ for its worst month since February 2009.
Forsyth Barr broker Suzanne Kinnaird said while Asian benchmark indexes followed Wall St down as the selloff unfolded, Europe and UK markets climbed into positive territories as currencies weakened.
Factors influencing the week’s trading included mixed global earnings, budget conflicts between the European Union and Italy, criticism of Saudi Arabia over the killing of a journalist, and ongoing USChina trade tensions.
Asia stocks had tumbled on Thursday. Japan’s Nikkei was near a seven month low, dropping 3.72%, South Korea’s Kospi was down 1.63%, and Hong Kong’s Hang Seng down 1%, while the Shanghai Composite gained 0.02%.
AUCKLAND: New Zealand shares were mixed as weaker than expected earnings from global tech giants spooked investors already wary of overvalued equity markets.
The S&P/NZX 50 index edged up 0.17 of a point, or 0.002%, to 8568.40, snapping a fiveday decline. Within the index, 21 stocks gained, 20 fell and nine were unchanged. Turnover was $121.7 million.
The local bourse teetered between positive and negative territory after results from Amazon and Google missed expectations, casting a pall across Asian equity markets. Australia’s S&P/ASX 200 index was down 0.5% in afternoon trading, while China’s Shanghai Composite index fell 0.6%.
Matt Goodson, managing director at Salt Funds Management, said intraday volatility was very high through the session.
‘‘There’s not much bid tone at all and buyers are being very nervous,’’ Mr Goodson said.
Global financial markets have been contending with a return of heightened volatility in recent months as investors fret over the pace of global growth and weigh up the prospect of higher interest rates.
That has seen the NZX 50 fall from a record in September, although it is yet to cross the 10% threshold indicating a technical correction. The local bourse is the only major stock index in AsiaPacific that is still in positive territory for the year to date, up 2%.
Mr Goodson said a number of primarily larger companies had become very expensive during that run.
‘‘Really we’re seeing something of an unwind of the greatest excesses of it over the last three or four months,’’ he said.
Spark New Zealand slipped 0.1% to $3.83 on 4.7 million shares traded, well ahead of its 2.7 million 90day average. Kathmandu rose 0.4% to $2.63 on 14 times its average volume with 2.8 million shares traded.
Among other stocks with more than one million shares traded, Argosy Property was unchanged at $1.09, SkyCity Entertainment Group fell 1.9% to $3.70, Ryman Healthcare was unchanged at $11.77, Air New Zealand rose 1.5% to $2.655, A2 Milk Co fell 0.5% to $9.86, Z Energy gained 1.2% to $5.92 and Mercury NZ increased 1.4% to $3.375.
Pushpay led the market higher, up 5.2% to $3.66 from a twomonth low. Fletcher Building increased 1.9% to $5.82, rising from a sixmonth low.
Heartland Bank gained 1.3% to $1.54. Trading in the stock is now halted until November 1 when it restructures into Heartland Group, enabling its Australian reverse mortgage business to operate outside the umbrella, and prudential supervision, of the licensed bank.
Tourism Holdings fell 3% to $4.90 on slightly higher than average volume; Synlait Milk dropped 2.9% to $8.41 on lighter volumes than usual.
Outside the benchmark index, the tightlyheld trucking firm TIL Logistics gained 1.3% to $1.60 after predicting earnings growth on an expanding economy and recent acquisitions.
Mainfreight, whose transport and logistics operations span the globe, increased 0.3% to $28.07.
New Zealand Oil & Gas rose 5.2% to 61c after reporting gas indications at the Kohatukai1 onshore exploration well southeast of New Plymouth. After the close of trading, NZOG said it reached a conditional agreement to farm into a permit off Western Australian held by its ASXlisted subsidiary Cue Energy.
New Zealand Refining fell 1.3% to $2.33 on modest volumes after appointing James Miller as an independent director.
Among firms facing takeover bids, Restaurant Brands New Zealand gained 0.1% to $8.51, SLI Systems increased 1.7% to 60c and Tilt Renewables was unchanged at $2.28.
A The Australian share market pulled itself off the canvas and finished slightly higher after a choppy day’s trading and despite the US futures markets looking ominous.
The benchmark S&P/ASX200 index was up 1.1 points, or 0.02%, at 5665.2 points on Friday, while the broader All Ordinaries closed up 0.1 point at 5759.6 points
The local share market was down by as much as 0.7% with less than an hour’s trading left, but it closed flat due to a late push driven by banking and mining stocks.
But the index is still heading towards its worst month since the global financial crisis. After tumbling nearly 25% on Thursday following the announcement it will sell its Australian and New Zealand wealth protection and mature businesses, AMP kept falling and closed 4.8% lower at $2.38.
Mining giants BHP, up 1.3% to $31.20, and Rio Tinto, 0.9% higher at $74.16, lifted the sector higher for the first time in four sessions. — BusinessDesk/AAP