Market commentaries
WELLINGTON: New Zealand shares ended the week on an upbeat note after stock markets were knocked around by the global outbreak of coronavirus. A weaker kiwi buoyed exporters such as Fisher & Paykel Healthcare.
The S&P/NZX 50 Index rose 51.8 points, or 0.4%, to 11,717.44. Within the index, 28 stocks rose, 17 fell and five were unchanged. Turnover was $218.1 million.
Shane Solly, a portfolio manager at Harbour Asset Management, said it was a challenging week for markets as uncertainty around coronavirus had caused investors to step back and wait for more information.
‘‘Reporting season kicks in in a week’s time, and that tends to put people on the back foot. So, there is uncertainty with what’s happening with coronavirus and investors waiting to see what is happening with results.’’
China’s increasing importance as an export market — accounting for 28% of New Zealand’s merchandise exports in 2019, up from 5% in 2008 — leaves the local economy more exposed to any disruption in the world’s most populous nation.
Headlines have been dominated by the coronavirus outbreak over the past week and ahalf as investors started assessing the potential impact on the global economy.
Up to 10,000 cases of the virus have been reported in China, US authorities confirmed the first case of humantohuman transmission in the US, Russia closed its land border with China and the Ministry of Health reported a suspected infection in Auckland.
The New Zealand dollar eased further overnight, falling below US65c for the first time since early December, as anxiety about the coronavirus crisis crowded out other data that investors usually focus on. While bad news for some, the weak currency will be a welcome boost to exporters like F&P Healthcare, which derives most of its income overseas.
F&P Healthcare rose 3.1% to $23.30 on a volume of 901,000 shares, and got a strong lead from upbeat earnings from Phillips Healthcare and Californiabased healthcare firm ResMed.
Europe’s largest asset manager, Amumdi, yesterday said the trough for markets could come in advance of the peak of the epidemic, as markets tend to overreact at the beginning of a crisis and then stabilise and rebound, despite the continuation of the negative news flow.
Travel and tourism companies have been the hardest hit by the fears over the outbreak. Some of those stocks recovered yesterday.
Tourism Holdings led the market higher, up 4.6% at $2.99 on a volume of 210,000 shares. Air New Zealand rose 2.2% to $2.82 on a volume of 1.5 million shares, and Auckland International Airport rose 1.2% to $8.65 on a volume of 1.8 million shares.
SkyCity Entertainment Group fell 1.4% to $3.64 on a volume of a million shares.
A2 Milk, which has a large exposure to Chinese consumers, fell 2% to $15 on a volume of 1.3 million shares.
■ The Australian sharemarket closed marginally higher yesterday, its first losing week this year, but still had its best month since last February.
The benchmark S&P/ASX200 index finished yesterday up 8.8 points, or 0.13%, at 7017.2, while the broader All Ordinaries index gained 12.6 points, or 0.18%, to 7121.2.
CMC Markets chief market analyst Michael McCarthy said the market was jittery, Mr McCarthy said, ahead of three key risk events: Brexit, which is set to finally occur today, NZ time; a US Senate vote on whether to allow witnesses at President Donald Trump’s impeachment trial; and the reopening of markets in China after the coronavirus outbreak.
Allowing witnesses at the Senate trial could unnerve the mercurial US president, Mr McCarthy said.
How China’s markets react when the trading resumes on Monday for the first time since January 23 will be an important factor in driving sentiment.
Australia’s biggest companies were the biggest losers yesterday, with the ASX20 index of the largest 20 corporations falling 0.1%, while the Small Ordinaries Index of Australia’s small cap companies gained 0.57%.
The big banks were all down, with Westpac falling 0.8% to $25.12, Commonwealth down 0.2% to $85.26, NAB down 0.1% to $25.86 and ANZ down 0.3% to $25.75.