Pause in shares’ six-day winning streak

Lull in NZX50 after earnings season natural, says analyst

New Zealand shares snapped a six-day winning streak as investors pause for breath with the benchmark index near a record and outperforming all bar China’s CSI 300 Index across Asia so far this year.

The S&P/NZX 50 Index decreased 16.06 points, or 0.1 per cent, to 11,202.93. Within the index, 20 stocks

fell, 25 rose, and five were unchanged. Turnover was $107.7 million.

New Zealand’s benchmark is still up about 27 per cent so far this year, lagging China’s CSI 300’s 32 per cent gain. China’s Shanghai Stock Exchange Composite Index is the third-best performer in the year to date, up 21 per cent, according to Refinitiv data.

“We’re in a bit of a lull just after earnings season, but the NZX50’s gone through 11,000 — it’s only natural to expect it to pause for breath at some point,” said Greg Smith, head of research at Fat Prophets.

Smith said the trade dispute between US and China continues to be a cause of concern for investors.

The prospect of upcoming negotiations was welcomed by investors, but Smith noted White House economic adviser Larry Kudlow said the conflict could take years to resolve.

Stocks with global exposure — both importers and exporters — were among those to decline.

A2 led the market lower, down 3.3 per cent at $14.89 on a volume of 470,000 shares, less than its 90-day average of 784,000. Synlait Milk, which supplies A2 and is reporting earnings on Thursday, decreased 0.5 per cent to $9.40.

Mainfreight fell 2 per cent to $40.52, Scales Corp was down 1 per cent at $5, and Fisher & Paykel Healthcare slipped 0.7 per cent to $17.51. Sky Network Television decreased 1.8 per cent to $1.11 on a volume of 2.8m shares, the biggest volume for the day, and more than three times its 756,000 average.

New Zealand’s market has been a favourite among investors because of the relatively high dividend yields on offer at a time when low international interest rates boost the allure of reliable income from utility and property stocks. Those yield plays were mixed yesterday. Genesis Energy fell 0.7 per cent to $3.635 on a volume of 1.6m shares, Kiwi Property was down 0.6 per cent at $1.68, Contact Energy fell 0.6 per cent to $8.93, and Mercury NZ decreased 0.4 per cent to $4.23 on a volume of 1.5m shares.

Trustpower posted the day’s biggest gain, up 3.5 per cent at $8.24 on a volume of 23,000 shares, less than a third of its 78,000 average. Infratil increased 2.3 per cent to $4.98 on a volume of 1.2m shares,

Meridian Energy was up 1.6 per cent at $5.66 on a volume of 1.1m and Goodman Property Trust rose 1.3 per cent to $2.24 on a volume of 2.5m units. Of other stocks trading on volumes of more than a million shares, Spark New Zealand rose 1.3 per cent to $4.705 and Fletcher Building rose 2.3 per cent to $4.82.

NZX was down 0.8 per cent at $1.28. A steering committee report on how to revive NZ’s capital markets made 42 recommendations, including changing the tax regime for KiwiSaver funds and share trading.