Local shares follow Wall Street down

US factory index fell to its lowest level since June 2009

New Zealand shares played followthe-leader, following Wall Street lower after poor US manufacturing data highlighted the risks to the global economy.

The benchmark S&P/NZX 50 Index fell 45.35 points, or 0.4 per cent, to 10,951.64. Within the index, 10 stocks rose, 34 fell and 6 were unchanged. Turnover was $121.7 million.

The broad measure of US stocks, the S&P 500 Index, shed 1.23 per cent overnight and markets throughout Asia followed it lower.

The US Institute for Supply Management’s factory index fell in September to its lowest level since June 2009 and followed disappointing manufacturing data from Europe and China, suggesting the US-China trade war is denting world growth.

New Zealand equities manager at JB Were, Rickey Ward, says trading was quiet because of school holidays and because those at work are busy writing their September quarter reports.

Some of the larger, high-yielding blue chip stocks that pay steady dividends and have been benefiting from falling interest rates led the market lower such as Goodman Property Trust, Contact Energy and Meridian Energy with strong volumes traded.

Goodman units fell 1c, or 0.45 per cent, to $2.21 with more than 3 million shares traded, making it the most heavily traded stock yesterday. But its shares are still up more than 44 per cent in the past 12 months compared with the NZX 50’s 17 per cent gain.

Contact shares eased 5c, or 0.58 per cent, to $8.53 with nearly 700,000 shares traded but are up about 45 per cent from a year ago.

Meridian shares slipped 3c, or 0.57 per cent, to $5.24 with 1.9 million shares traded and they have gained about 62 per cent in the last 12 months.

Stocks linked to housing markets like Ryman Healthcare and Summerset both fell, Ryman down 12c, or 0.9 per cent to $13.27 and

Summerset losing 17c, or 2.55 per cent, to $6.50. As well as operating retirement villages in New Zealand, both companies have moved across the Tasman to start villages in the Victorian market.

New Zealand house prices rose 2.9 per cent in the year ended August but prices in the largest city, Auckland, were down 1.5 per cent. Australian house prices rose 0.9 per cent in September but are still down 3.9 per cent from a year ago.

Fletcher Building also had a poor day, shedding 2.71 per cent to $5.02.

The stand-out stock yesterday was

Infratil, which gained 9c, or 1.85 per cent, to $4.96 and it was also the second-most heavily traded with 2.66 million shares changing hands. The Fonterra Shareholders

Fund was also among the day’s gainers, up 3c, or 0.86 per cent, to $3.51, but that’s in the context of the stock having fallen about 28 per cent in the last 12 months.

Last month, Fonterra posted a net annual loss attributable to shareholders of $557 million, widening from its maiden loss of $221m a year earlier. Ward says the result was better than the market had expected because the co-operative had guided down expectations so much, “that’s a poor reason to celebrate”.