Market commentary

WELLINGTON: The New Zealand sharemarket gave up some of its recent hardearned gains, led down by the energy stocks hit by dry weather in both the North and South Islands.

The S&P/NZX 50 Index fell 89.28 points or 0.7% to 12,678.55, and the index did stage a late recovery after reaching an intraday low of 12,574.25. There were 51 gainers and 94 decliners over the whole market, as 52.36 million shares worth $197.88 million changed hands.

Matt Goodson, managing director of Salt Funds Management, said ‘‘the question is, do markets keep on running? The corporate earnings outlook is reasonable without being outstanding, and it depends on whether central banks will maintain their present monetary policy with inflation starting to creep in’’.

With hydro storage well below the historical average, the leading energy stocks were pegged back. Meridian fell 14c to $5.75, and Contact was down 25c to $7.50. Mercury Energy declined 15.5c to $6.665, Trustpower shed 13c to $8.64, and Genesis was up 5c to $3.45.

Mr Goodson said it was unusual for the North and South Islands to be dry at the same time and that had created a problem for the gentailers. There is a tiny bit of nervousness over Government comments about how well the market is functioning.

There was also uncertainty around the investors positioning before the exchangetraded funds selling and people were modestly surprised at how well the Contact and Meridian prices held up — and now they have drifted off.

The extent of the BlackRock iShares Global Clean Energy Exchange Traded Funds selling in Meridian and Contact Energy was shown in the substantial shareholder notices to the NZX. US global investment manager BlackRock reduced its holding in Meridian from 7.09% to 3.33%, selling nearly 100 million shares. BlackRock cut its stake in Contact from 14.35% to 4.86%, selling about 66 million shares.

Travel stocks came back to earth following the start of the transtasman travel bubble.

Air New Zealand fell 4c to $1.76, and Auckland International Airport was down 3.5c to $7.695.

SkyCity Entertainment lost 7c to $3.41, while Serko was up 11c to $6.95.

Fisher and Paykel Healthcare was down 35c to $33.50, a2 Milk fell 30c to $8.62, Fletcher Building declined 14c to $7.04, Chorus decreased 7.5c to $6.47, Port of Tauranga shed 11c to $7.36 and Napier Port was down 15c to $3.44.

Skellerup Holdings rose 8c to $4.39, after providing a strong upgrade to its fullyear net profit forecast the day before.

Ebos Group broke through the $31 mark, rising 38c to $31.08.

Strong dividend stock Spark climbed 10.5c to $4.48, Summerset Group Holdings rose 10c to $12.10, Infratil was up 9c to $7.09, Seeka increased 10c to $5.15, The Bankers Investment Trust gained 6c to $2.36 and Scott Technology was up 4c to $2.67.

NZME was down 3c to 79c after being fined a total of $100,000 by the NZ Markets Disciplinary Tribunal for breaching the NZX listing rules last year, concerning the negotiations to buy Stuff from Australia’s Nine Entertainment. — The New Zealand

Herald