NZX 50 makes ‘dismal start’ to week

The New Zealand sharemarket has had a ‘‘dismal start’’ to the week as investors remain wary of interest rate increases.

The S&P/NZX 50 index finished yesterday at 12,329.09 points, down 1.49 per cent.

Hamilton Hindin Greene chief financial officer Grant Williamson said some of the current dip in the market could be blamed on small spikes in interest rates. ‘‘That just caused a little bit of selling among equity investors on expectations that interest rates will continue on an upwards trend, which has a bit of an effect on the share prices,’’ he said.

Yesterday’s results were a ‘‘dismal start’’ to the week, he said.

A handful of stocks weighed on the overall market, he said.

The two green electricity stocks, Contact Energy and Meridian Energy, that did well over the Christmas period were now seeing a bit of selling, he said.

Contact’s share price ended yesterday at $6.97, down 1.41 per cent, while Meridian closed at $5.42, a 3.21 per cent drop.

Spark also gave up what it had gained on Friday, Williamson said. The telecommunications company lost 2.5 per cent, ending the day at $4.49 a share.

Freightways was the standout for the otherwise muted day, jumping 3.43 per cent to close at $11.15 a share.

‘‘There’s no real reason for it – it’s not traded in heavy volumes, so obviously some reasonable sized buying in that stock has pushed that up,’’ Williamson said.

Investors had not reacted significantly to the Government’s announcement of a potential travel bubble, he said.

‘‘We did see some buying in Air New Zealand at the start of the day but that [stock price] was now more or less unchanged.’’

Williamson said New Zealand had generally underperformed through February compared with international markets.

There was a little bounce-back in March, but the market was now coming under a little selling pressure again, he said. ‘‘Australia is holding its own and Wall Street made record highs last week, whereas we have not managed to get anywhere near the record highs we saw in late December and early January.’’

‘‘We have not managed to get anywhere near the record highs we saw in late December and early January.’’

Grant Williamson

Hamilton Hindin Greene chief financial officer