Market commentary

WELLINGTON: The New Zealand sharemarket fell nearly 2% yesterday and the New Zealand dollar reached a 13year low against the US greenback.

The S&P/NZX 50 Index dropped 220.32 points to 11,214.49, the biggest singleday fall since midMay.

There were 122 decliners and just 29 gainers on volume of 39.41 million share transactions worth $156.20 million.

Hamilton Hindin Greene investment adviser Jeremy Sullivan said the New Zealand market was playing catchup to two negative days overseas.

‘‘We’ve seen fun and games with the British pound reaching an alltime low against the American dollar,’’ he said.The tax cuts in the UK’s mini budget were stimulatory and more inflationary and that means higher interest rates.

‘‘At home, analysts are now saying there’s an 85% chance of our official cash rate reaching 4.75%,’’ Sullivan said.

The NZ dollar traded down to US56.28c but recovered to US57.05c. It was last at that level in 2009 as the world began recovering from the Global Financial Crisis.

Synlait Milk reported a solid result for the 12 months ending July with a 21% increase in revenue to $1.66 billion. It was caught up in the market selloff and declined 19c to $3.37. However, its main customer a2 Milk increased 11c to $6.10.

The property sector was weak as interest rates rise and company valuations are affected. Argosy fell 7c to $1.20; Stride was down 11c to $1.64; Goodman Trust declined 7.5c to $2.045; Precinct Properties fell 7.5c to $1.27; and Property for Industry was down 16c to $2.38.

In the energy companies, Genesis lost 15c to $2.74; Vector declined 19c to $4.21; Mercury fell 15.5c to $5.75; Contact Energy dropped 7c to $7.75. Meridian was down 9c to $4.91. It told the market NZ Aluminium Smelters was not reopening potline 4 at Tiwai Point.

Auckland International Airport declined 19c to $7.43; Air New Zealand was down 2.5c to 70.5c; Chorus dropped 14.5c to $7.415; Freightways lost 35c to $9.85; and Fletcher Building was down 18c to $4.98.

Other decliners were SkyCity $2.72 (down 13c); Serko $3.18 (23c); NZME $1.14 (6c); Gentrack $1.32 (13c); Vulcan Steel $7.72 (48c).

Among the few gainers, Spark was up 3.5c to $5.125; Michael Hill added 3c to $1.31; Foley Wines gained 7c to $1.49; and Smartpay rose 3.5c to 74c. —