Sharemarket falls
Weaker oil price weighs on stocks
New Zealand shares joined a global retreat as weaker oil prices weighed on energy stocks and a downgrade of Australia’s major banks saw duallisted companies, including Fletcher Building, fall, while Air New Zealand declined in heavy trading.
The S&P/NZX 50 Index dropped 59.42 points, or 0.8 per cent, to 7527.11, having touched a record high on Tuesday. Within the index, 25 stocks fell, 11 rose, and 14 were unchanged. Turnover was $180 million, of which $60m was in Air New Zealand shares
Stocks across Asia declined, following Wall Street’s lead, after oil prices fell to a seven-month low as efforts to curb global production struggle to gain traction.
Dual-listed shares led the market lower, with Fletcher Building falling 2.8 per cent to $7.77, Chorus declining 2.3 per cent to $4.62, and Xero down 2.3 per cent to $25.30. Westpac Banking Corp dropped 2.2 per cent to
$31.19 and ANZ Banking Group fell 2 per cent to $28.79.
“We’ve got a flow on impact from weaker oil — BHP and that are all down in Australia — that’s created a level of unsettledness right through the markets,” said Rickey Ward, NZ equities manager at JBWere in Auckland. “It has that real feeling that it is international flows exiting New Zealand a little bit because it is in those leaders.” Transport fuels company Z En
ergy fell 1.3 per cent to $7.55 and energy explorer New Zealand Oil &
Gas dropped 1.4 per cent to 64c. Refinery operator New Zealand Refining was unchanged at $2.41.
Air New Zealand fell 2.5 per cent to $3.17 with 19.1 million shares changing hands, the biggest volume since the Government sold down its stake in late 2013. The airline’s shares have jumped 48 per cent so far this year as the carrier upgraded earnings.
“It had been punished a bit on expectations earnings would be down this year in the face of higher oil prices and increased competition but things have turned their way,” Ward said. Tourism Holdings posted the biggest gain on the day, up 3.2 per cent to $3.95 after the campervan rental group raised earnings guidance on the strength of its New Zealand and US businesses.
Spark fell 0.7 per cent to $3.74, Auckland International Airport rose 0.6 per cent to $6.99, and Ryman Healthcare slipped 0.5 per cent to $8.31. Power companies Meridian Energy increased 0.2 per cent to $2.985 and Contact Energy gained 0.2 per cent to $5.17. Units in the Fonterra Share
holders Fund, which gives investors exposure to Fonterra Cooperative Group’s earnings, increased 0.2 per cent to $5.94. Dairy prices, which are an input cost for the milk processor, fell at the latest Global Dairy Trade auction. Milk marketer A2 Milk fell 0.7 per cent to $4.05, while Synlait
Milk dropped 2 per cent to $4.02. Outside the benchmark index,
Smith City Group rose 1.5 per cent to 68c after reporting a 54 per cent boost in underlying annual earnings, largely from widening margins in its finance division.