Market commentaries
WELLINGTON: New Zealand shares fell as Fletcher Building dropped to a 14year low, adding to Tuesday’s rout after its profit warning. Trade Me soared to a record on a potential takeover.
The S&P/NZX 50 index dropped 47.9 points, or 0.5%, to 8672.40. Within the index, 29 stocks fell, 14 gained, and seven were unchanged. Turnover was $195.7 million.
Fletcher fell 4.7% to $4.70, the lowest level since mid2004. That added to yesterday’s 11% slump when Fletcher warned firsthalf earnings will fall 10% and noted tougher conditions in Australia. The stock was the most heavily traded, with 7.2 million shares changing hands yesterday, compared to the 1.2 million 90day average.
David Price, a broker at Forsyth Barr, said Fletcher struggled to capitalise on New Zealand’s construction boom which is passed its peak and now faces a slower market across the Tasman also.
‘‘What people are concerned about is that this is just the start of the downturn,’’ he said.
Growth stocks were also weaker as the local market joined a worldwide decline amid fears that slower global growth will crimp company earnings.
A2 Milk fell 3.4% to $10 on average volumes, Gentrack Group declined 3.7% to $6.45 on very light trading and Pushpay Holdings was down 3.3% at $2.90 on more than twice its average volume.
Price said the heightened volatility in financial markets hadn’t been accompanied by volumes associated with panic selling, but the local market was drifting lower.
‘‘Profit growth is not really there to support these higher multiples,’’ he said.
Trade Me was the standout in the market, jumping 16% to a record close of $5.93. The online auction site received a nonbinding offer from UK private equity firm Apax Partners at $6.40 a share.
Outside the benchmark index, NZME slumped 18% to 53c, a twoyear low. The company yesterday warned that annual earnings would fall by as much as 21% and said it probably wouldn’t pay a final dividend.
A late rally from banking and healthcare helped lift the Australian sharemarket off a near twoyear low but commodityrelated stocks and tech shares weighed heavily.
The benchmark S&P/ASX200 index was down 29 points, or 0.51%, at 5642.8 at 1615 AEDT yesterday, while the broader All Ordinaries was down 0.64%.
The market is yet again flirting with the 56405650 points mark which many analysts view as a floor of resistance, CommSec market analyst James Tao said.
‘‘The area has been a little of resistance for the markets over recent times and it continues to trade just above it,’’ he said.
Plummeting oil prices — weakened by wider uncertainty in global equities — decimated local energy stocks, with the sector dropping nearly 2.5%. Commonwealth Bank led the gains for the big four lenders, up 1.2% to $70.06, and ANZ the least, up 0.5% to $25.42, while Macquarie lost 1.9% to close at $112.77.
Healthcare was a consistent bright spot as sector giant CSL jumped 1.7% to $178.77, and Sonic Healthcare climbed 4.1% on a stronger earnings report.
Coles shares floated at $12.49 and lifted 26c by the close, while Wesfarmers was down 27.7% to $31.96 with the major supermarket no longer in its stable.
The Reject Shop jumped 14% to $2.77 when it received a $78 million takeover bid.
The Australian dollar fought a rearguard action as a rout in global share markets and a new broadside on USChina trade sent investors to safe currencies.
The Aussie dollar was down at US72.31c at 1630 AEDT, from 72.76 on Tuesday.