Investors pin their hopes on company results

Investors are now looking to a solid reporting season next month to arrest the slide in the New Zealand sharemarket, which ended a turbulent week with one of its biggest single-day falls. The S&P/NZX 50 started falling at lunchtime after a bright morning and closed at 11,852.15, down 198.17 points or 1.64 per cent.

The index was down more than 4 per cent for the week. It fell through the 12,000 mark for the first time since early October 2020 and is now more than 12 per cent below the all-time high of 13,558.19 (on January 8 last year) — well and truly in correction territory.

There were 52 gainers and 91 decliners over the whole market on much-improved volume of 40.47 million share transactions worth $201.64 million.

Dan Stratful, investment adviser with Forsyth Barr, said the market has had to price in a lot of situations lately — rising interest rates, Covid restrictions and now staff absenteeism caused by Omicron.

“There are plenty of headwinds. For any turnaround, company earnings need to hold up and support the market. I don’t think anyone is expecting weak financial results and the latest reporting season should get a pass mark.

“I guess the economy matters more than the sharemarket, and it has to stand on its two feet and get used to the fact that interest rates are going up.”

Mercury Energy fell 26c or 4.48 per cent to $5.55 after downgrading its full-year operating earnings (ebitdaf ) forecast to $570m, from $590m, because of an expected fall in hydro generation resulting from dry weather in the Taupo catchment.

Other energy stocks suffered. Contact was down 10c to $7.55; Meridian fell 16c or 3.56 per cent to $4.34; and Vector declined 15c or 3.85 per cent to $3.75.

Market leader Fisher & Paykel Healthcare was down $1 or 3.45 per cent to $28 on trade worth $43.69m; Mainfreight shed $1.70 or 1.98 per cent to $84; Auckland International Airport fell 19c or 2.61 per cent to $7.10; and Port of Tauranga declined 14c or 2.16 per cent to $6.35.

The retirement village sector continued to be hit. Ryman Healthcare went under $10, falling 35c or 3.43 per cent to $9.85 — its lowest level since late March 2020.

Summerset Group Holdings was down 17c to $11.91; Arvida declined 2c to $1.69; and Oceania Healthcare fell 5c or 4.2 per cent to $1.14.

Fletcher Building shed a further 6c to $6.48; Steel & Tube fell 5c or 3.16 per cent to $1.53; Vista Group was down another 7c or 3.38 per cent to $2; and NZME declined 5c or 4.24 per cent to $1.13.