Market commentaries

AUCKLAND: New Zealand shares fell in the first trading of 2019, led lower by Kathmandu Holdings, which was punished for posting weakerthanexpected Christmas sales.

The S&P/NZX50 dropped 78.9 points, or 0.9%, to 8732.37. Within the index, 38 stocks fell, six rose, and six were unchanged. Turnover was $85.6 million.

Kathmandu sank 14% to $2.37, a sixmonth low, after saying trading fell short of management’s expectations through the Christmas period — sales were down 1% in the 22 weeks through December 30 from a year earlier. Still, it managed to improve gross margins by 60 basis points to 64%, and said firsthalf profit will probably rise 4%8%.

‘‘Sales growth was below expectations, albeit margins were still pretty solid,’’ Matt Goodson, managing director at Salt Funds Management, said.

‘‘This is a market where, if a company disappoints, it takes no prisoners.’’

Heartland Group remained under pressure, down 4.4% at $1.32, a new twoyear low.The lender has been under pressure since the Reserve Bank said it will impose tougher capital requirements on licensed banks. New Zealand Refining fell 3.8% to $2.26 on twice its average volume, while Mercury NZ was down 3.7% at $3.51 on half its average volume.

Large defensive stocks were among the few gainers on large volumes. Electricity generatorretailer Meridian Energy rose 0.4% to $3.42 on a volume of 1 million, while Precinct Properties New Zealand was up 0.3% at $1.485 on a volume of 1.2 million and Auckland International Airport increased 0.3% to $7.20 on a volume of 1.2 million.

Kiwi Property Group was the most actively traded stock with a volume of 2.2 million, almost twice its 90day average. It fell 1.8% to $1.34. Spark New Zealand decreased 0.2% to $4.14 on a volume of 1.5 million, half its average.

Mr Goodson said defensive stocks remained attractive in a volatile environment. There were sharp global currency movements after Apple Inc downgraded its earnings guidance, based in part on weakness in Chinese leading indicators.

Fonterra Shareholders Fund units rose 0.2% to $4.65 after prices at the GlobalDairyTrade auction rose in the first event of 2019, on smaller supply. Fonterra cooperative Group’s shares, which trade in a closed market for farmers, fell 0.6% to $4.64.

Rival processor Synlait Milk was unchanged at $9, while milk marketing firm a2 Milk fell 1.4% to $11.

Sky Network Television rose 2.7% to $1.90, the biggest gain on the day.

Outside the benchmark index, Promisia Integrative was unchanged at 0.2c after the dietary supplements firm raised $1.35 million in a 3for1 rights issue.

The ASX surged ahead with gains across all the major sectors, while the Australian dollar has mostly rebounded from a flash crash that hit many major currencies.

The benchmark S&P/ASX200 index closed up 75.6 points, or 1.36%, to 5633.4 led by energy stocks, after oil prices rose.

The broader All Ordinaries was up 69 points, or 1.23% to 5694.6.

On Wednesday the ASX200 dropped 88.6 points, or 1.57%.

The Australian crashed 6% against the Japanese yen, 3% against the greenback and 2.9% against the pound in just seven minutes, hitting 10year lows against the yen and the dollar.

All the major currencies showed similar movement against the yen during that time.

The crash was blamed in part on algorithmic trading during an illiquid market.

The Australian had recovered most of its losses by the afternoon but at US69.42c was at its lowest level in three years.

In the share market, energy stocks were up 2.97%, financials up 1.75% and telecoms up 2.32%.

Shares in Healius, formerly Primary Health Care, surged 7.79%, to $2.63, after the Sydney medical centre and pathology group said it had received a $2.02 billion takeover offer from a Hong Kong company. The big banks were up from between 1.23% and 2.29%, led by Westpac, which gained 56c to close at $25.04. Among energy stocks, Woodside Petroleum gained 3.44%, to $31.54 and Santos was up 3.94%, to $5.49, after US oil prices gained 2%, to $US46.33 a barrel. — BusinessDesk/AAP