Bear very much at home as eventful week ends

New Zealand shares closed the eventful week of bear markets and mighty rate hikes with a strong afternoon recovery, and the leading index fell half a per cent despite another plunge on Wall Street.

The S&P/NZX 50 Index dropped a further 57.38 points or 0.54 per cent to 10,589.19. The index ended the week down nearly 5 per cent and has fallen more than 22 per cent (excluding dividends) so far this year, inside bear market territory.

There were 107 decliners and 38 gainers on the main board, with 81.94 million shares worth $439.79 million changing hands because of the quarterly rebalancing of the NZX and FTSE Russell indices.

Ebos Group, up 4c to $39.14, dominated the flurry of trading with $101.15m worth of its shares changing hands. Spark, down 5c to $4.61, had trade worth $46.46m; Fisher & Paykel Healthcare $38.35m; and a2 Milk $37.87m.

After the biggest interest rate hike in 28 years, investors in the United States started fretting that the Federal Reserve’s efforts to curb inflation will pull the economy into a recession, and stocks again plunged.

The Dow Jones Industrial Average went under 30,000 points for the first time since January last year, falling 2.42 per cent to 29,927.07. The S&P 500 was down 3.25 per cent to 3666.77 points and the Nasdaq Composite, now down 31.95 per cent so far this year, fell 4.08 per cent to 10,646.10.

The S&P 500 and Nasdaq Composite fell further into bear market territory, down 24 per cent and 34 per cent respectively from their all-time highs. The Dow Jones, having fallen in 11 of the past 12 weeks, is 19 per cent below its January 5 high of 36,799.65 points.

At home, companies which have fared well during the past two years and have solid, stable businesses were not being spared.

Market leader Fisher & Paykel Healthcare fell a further 35c or 1.8 per cent to $19.10 after sitting at $33.78 on November 25; Freightways declined 10c to $9.28; and Skellerup Holdings shed 24c or 5.11 per cent to $4.46.

Mainfreight was trimmed $2.03 or 2.86 per cent to $68.96 after reaching $98.52 on September 1 last year; and Vulcan Steel was down 30c or 3.4 per cent to $8.52.

“Maybe investors are looking through the pandemic beneficiaries and recycling into the stocks that have been fundamentally over-sold,” said Jeremy Sullivan, Hamilton Hindin Greene investment adviser. “There was some positivity in our market with bargain hunters coming in and picking some beaten-down stocks.”