Shares on NZX down $2.4b
About $2.4 billion was knocked off the value of the 180 companies listed on the NZX yesterday as investors reacted to growing concerns over the spread of the coronavirus outbreak in China.
At one point the combined value of the shares was down by more than 2 per cent, or $3.4b, before a mild afternoon recovery saw the NZX ‘‘all shares’’ index close about 1.4 per cent lower.
However, the decline only took their values back down to the levels of January 13.
Air New Zealand shares slumped 2.8 per cent to $2.74 in the wake of the Government announcing temporary bans on visitors from China and have now fallen more than 10 per cent since the virus outbreak.
Shares in Tourism Holdings, which have been hit even harder, were down 6.4 per cent at $2.80.
Auckland Airport shares were down 2.9 per cent at $8.50, and
A2 Milk was down 2.3 per cent at
$14.65.
The New Zealand dollar has fallen by 1.4 US cents to US64.6c since the outbreak was first reported by China but has been little changed against the Australian dollar.
The NZX decline followed a
2.1 per cent drop on the Dow Jones index in the United States at the close of its last session on Saturday, New Zealand time, and a 1.6 per cent drop in the technology rich Nasdaq index.
Shares in Shanghai were down 8.7 per cent when trading opened yesterday afternoon, New Zealand time, though some reports said the drop was not as much as had been expected.
Analyst Morningstar said China had taken steps to limit short-selling, ahead of its financial markets reopening, citing Reuters sources.
The China Securities Regulatory
Commission had issued ‘‘a verbal directive’’ to brokerages including Citic Securities and China International to bar their clients from selling borrowed stocks on February 3, it said.
Hamilton Hindin Greene investment adviser Grant Davies said during the depths of yesterday’s slump that the New Zealand market reaction was as might be expected in the wake of the declines on US sharemarkets but the fact markets only retreated as far as their pre-Christmas level provided some context.
‘‘Shares go up on escalators and down in elevators – that is the old adage,’’ Davies said.
‘‘It is all around the virus and the impact that will have on global growth.
‘‘Everyone is trying to factor that into their models at the moment, which is easier said than done.’’
The key number to keep an eye on was the spread of the virus, and how far and wide that was, Davies said.
The ASX200 index was down 1.2 per cent shortly after the New Zealand market closed.