Market commentaries
WELLINGTON: New Zealand shares joined a global selloff as a slump in US oil futures prices sapped investor sentiment that had been on the mend due to optimism over the slowing pace of the Covid19 pandemic.
The S&P/NZX 50 Index dropped 226.80 points, or 2.1%, to 10,535.87. Within the index, 37 stocks fell, nine rose, and four were unchanged. Turnover was $186 million.
Equity markets around the world fell after rapid selling of US May crude oil contracts pushed spot prices into negative territory for the first time.
The price shock weighed on Wall Street and Asian sharemarkets followed suit with Hong Kong’s Hang Seng falling 2.1%, Shanghai’s SSE Composite Index dropping 1.3% and Australia’s S&P/ASX 200 down 2%.
Nikko Asset Management head of equities Stuart Williams said the oil price did not weigh directly on NZXlisted companies’ share prices, but that the negative headlines gave investors a reason to back off last week’s rally.
‘‘Should it affect the companies that are driving our market down today? No,’’ Mr Williams said. ‘‘But our market was probably up a bit too strongly, and it’s a convenient headline for the market to move lower on.’’
While the virus appeared to be coming under control in New Zealand, the economic implications of the outbreak were only just emerging, he said.
The local market was led lower by companies that enjoyed a resurgence last week.
Tourism Holdings sank 11.6% to $1.22, Vista Group International dropped 8.1% to $1.37 and SkyCity Entertainment Group declined 6.4% to $2.33.
Mr Williams warned not to focus too much on the daily swings of those stocks, given their recent volatility, but rather to take a mediumterm view, especially while new lockdown conditions were being assessed.
On Monday, the Government extended the current restrictions until next Tuesday, spurring price action amid companies preparing to resume operations.
Fletcher Building — which would be able to resume construction projects — fell 4.3% to $3.79.
Restaurant Brands New Zealand — which expected to reopen its fast food drivethroughs at Level 3 — fell 2.5% to $11.75 after warning of a significant impact on the June quarter with all New Zealand stores closed for most of April. March quarter sales rose 5.3% to $200.1 million.
Ebos Group rose 1.1% to $24.18 after it said its healthcare division had experienced ‘‘unprecedented levels of demand’’ during the pandemic. Goodman Property Trust posted the day’s biggest gain, up 2.9% at $2.325. Refining NZ fell 3.1% to 92 cents. With a price cap and floor, Mr Williams said, the stock was insulated from the spot price shock of the day.
Fuel retailer Z Energy fell 3.6% to $3.21 as investors saw future outbreak alert levels would remain restrictive even for domestic travel.
Outside the benchmark index, Cavalier Corp fell 6.1% to 18.4 cents after it said it would reopen manufacturing operations in Auckland, Napier and Whanganui once Level 4 restrictions were lifted. Retail sales in New Zealand were halted during lockdown and the company said trading was negatively affected.
Tower fell 3.9% to 62.5 cents after it said it expected to book large claim expenses of between $10.5 million and $12.5 million from Cyclone Harold in the Pacific and the Timaru hailstorm.
The Australian sharemarket plunged for a second day yesterday, falling to nearly a twoweek low as US oil futures collapsed into negative territory.
The S&P/ASX200 benchmark index closed down 131.7 points, or 2.46%, to 5221.3 points, while the All Ordinaries index was down 134.5 points, or 2.45%, to 5353.0 points. — BusinessDesk/AAP