Shares stem losses as global stocks fall

SkyCity, Fletcher and Z Energy lead market lower

New Zealand shares joined a global selloff as investor sentiment soured amid warnings that easing lockdowns could cause a second wave of Covid-19 infections.

The S&P/NZX 50 Index slipped 30.64 points, or 0.3 per cent, to 10,788.03. Within the index, 31 stocks fell and 19 rose. Turnover was $236.2 million.

Stock markets across Asia followed Wall Street lower after US infectious disease expert Anthony Fauci warned premature lifting of lockdowns could trigger new outbreaks of the deadly coronavirus, claiming more lives and further damaging economies, many of which have started to reopen.

New Zealand’s benchmark index fell as much as 1.3 per cent during the day, before regaining some ground as US futures began to turn upwards.

“Our market started off weaker, but we’ve actually picked up some momentum,” said Peter McIntyre, an investment adviser at Craigs Investment Partners. SkyCity Entertainment Group

led the market lower, falling 5.5 per cent to $2.41, giving up the gains it made after the announcement New Zealand would move to alert level 2.

Fuel retailer Z Energy dropped 4.4 per cent to $3.04 after it released weekly fuel volume data showing demand still down 42 per cent compared to pre-lockdown levels.

Refining NZ fell 4.6 per cent to 83 cents.

The uncertain economic outlook drove investors away from Fletcher

Building, which fell 4.5 per cent to $3.20, ahead of a Budget announcement that may include new infrastructure projects.

“Investors are looking for something in the Budget for Fletcher, but the Government has already made pledges on infrastructure so it’s a question of whether there will be anything new,” McIntyre said. The day’s “risk-off mood” saw some companies give up recent gains. Tourism Holdings fell 3.6 per cent to $1.62, Kathmandu Holdings slipped 2.9 per cent to 99 cents and

Sky Network Television decreased 2.7 per cent to 36 cents.

The NZX50 was buoyed by the Reserve Bank’s decision to buy up $60 billion in government bonds, doubling its quantitative easing programme. It kept the official cash rate at 0.25 per cent, but said it was prepared to use more tools if and when necessary.

That pushed the New Zealand dollar lower offering a boost to the NZX’s two biggest stocks, Fisher & Paykel Healthcare and A2 Milk. Both com

panies sell products in international markets and benefit from a weaker currency. Fisher & Paykel Healthcare rose 3.3 per cent to $31.00 and a2 Milk increased 1.3 per cent to $19.55.

Fonterra Shareholders’ Fund units advanced 2.6 per cent to $3.50. Stock market operator NZX posted the day’s biggest gain, up 3.9 per cent at $1.35.

Westpac Banking Corp rose 1.3

per cent to $16.39 and ANZ Banking

Group advancing 0.4 per cent to $16.58. ASX-listed rival Commonwealth Bank of Australia yesterday provided A$1.5b ($1.6b) against potential losses from the Covid-19 crisis, and sold a controlling stake in Colonial First State.