Market commentaries

WELLINGTON: New Zealand shares followed Australia lower as investors weighed up the economic impact of a Covid19 lockdown being reimposed in the state of Victoria, where new cases of the coronavirus have spiked in the last week.

The S&P/NZX 50 Index declined 36.46 points, or 0.3%, to 11,707.27. Within the index, 28 stocks fell, 15 rose, and seven were unchanged. Turnover was $129 million.

Hopes of a swift Australian recovery from the pandemic and its economic effects evaporated on Tuesday night as Melbourne, the country’s secondbiggest city, was put into its second lockdown.

Australia’s S&P/ASX 200 Index opened weaker at noon in New Zealand, dragging down the Kiwi benchmark, which had been in positive territory in early trading.

‘‘The deepening Covid19 issues in Victoria are having some flow on effect locally,’’ Milford Asset Management portfolio manager Sam Trethewey said.

The developments were prompting a ‘‘rotation into safety’’ as investors sold stocks exposed to the Australian market in favour of local utilities.

Such selling was concentrated in stocks such as Kathmandu and Fletcher Building, which were more exposed to the

Australian economy Mr Trethewey said.

Vista Group International led the local market lower, falling 4.8% to $1.40. The cinema software provider’s customers include Hoyt’s, which operates 12 theatres in Victoria.

Kathmandu Holdings dropped 4% to $1.19. The outdoor equipment retailer also counts Australia as a key market. Last year, the group acquired surfwear brand Rip Curl, which was founded in Victoria.

SkyCity Entertainment Group — which operates a casino in Adelaide, South Australia — fell 3.5% to $2.51. The group yesterday completed a $50 million capital raising via share purchase plan at $2.38 per share. The underwritten offer attracted a 91% takeup rate, and the $4.4 million balance was allocated to existing shareholders who acted as subunderwriters.

Air New Zealand slipped 3.9% to $1.365, Fletcher Building declined 2.8% to $3.46 and Restaurant Brands New Zealand fell 2.8% to $11.81.

The duallisted lenders were weaker. Westpac Banking Corp fell 4% to $18.89 and Australia & New Zealand Banking Group declined 3.6% to $19.53.

Energy utility stocks were mostly stronger: Genesis Energy rose 2.9% to $3.15, Meridian Energy advanced 2.1% to $5.26, Mercury NZ increased 1.3% at $4.85 and Vector increased 1.1% to $3.75.

Telecommunications provider Spark New Zealand rose 1% to $4.675.

Skellerup Holdings reporting the day’s biggest gain, rising 4.1% to $2.30.

Metlifecare increased 0.2% at $5.80. The company is considering a takeover offer of $6 from Swedish buyout firm EQT, which had tried to walk away from an earlier offer of $7.

Outside the benchmark, health and wellness company Me Today shares were put on a trading halt at 12.9c after the company said it would raise up to $4.5 million by selling new shares at 9.5c each.

The Australian sharemarket has suffered its worst drop in nearly two weeks amid worries about rising virus cases in Victoria and overseas and following a drop in US markets.

The benchmark S&P/ASX200 index closed Wednesday down 92.6 points, or 1.54%, at 5920.3 points, while the All Ordinaries index dropped 92.4 points, or 1.51%, at 6034.3.

The Australian dollar was buying US69.34c, down from US69.52c on Tuesday. — BusinessDesk