Market commentary

WELLINGTON: New Zealand shares edged lower and gold hit another record as investors focused on the lingering uncertainty caused by the number of Covid19 cases continuing to rise globally.

The S&P/NZX 50 Index fell 14.00 points, or 0.1%, to 11,757.72. Within the index, 21 stocks fell, 18 rose, and 11 were unchanged. Turnover was $114.7 million.

Gold prices hit yet another record yesterday, breaking through $US2000 ($NZ2993) an ounce, while the yield on the 10year United States Treasury bond hit a record low at 0.51%.

‘‘Clearly, investor uncertainty about the global economic outlook is growing rather than receding,’’ ASB economist Mike Jones said.

Covid19 was far from under control globally, but fiscal stimulus was already starting to fade in the United States where the virus was on the rise, Mr Jones said.

The New Zealand dollar traded at US66.42c, up from US66c on Tuesday, as traders stayed on the sidelines ahead of next week’s Reserve Bank policy review. The tradeweighted index was at 71.97, up from 71.94.

OMF senior dealer Martin Rudings said there was too much uncertainty in the global economy, which underpinned the record prices in alternative assets such as gold.

Despite rocky global conditions, local labour market data showed the unemployment rate fell to 4% in the second quarter of the year, defying expectations of a sharp increase.

However, the data underneath the headline figure was less rosy: total labour market participation fell and 20,000 people who were not working because of the virus were not counted in topline figure.

When those people are included the number rises to 4.6%, but still beats economists’ forecasts which were widely north of 5%.

Hamilton Hindin Greene investment adviser Grant Davies said the equity market had taken a risk off mood yesterday, despite showing ‘‘cautious optimism’’ in recent weeks.

‘‘While the unemployment figures were good, if you look at what is happening with our major trading partners, there is still plenty of things to worry about,’’ he said.

Global logistics firm Mainfreight led the market lower, dropping 2.1% to $45.50. The stock rose sharply after it held an upbeat annual general meeting last week but is widely exposed to global economic conditions.

In contrast, local carrier Freightways, often considered a bellwether for the local economy, rose 0.1% to $7.01.

Fisheries firm Sanford fell 1.6% to $6.35 after it announced it would close its Tauranga processing plant owing to low North Island processing volumes. The closure will result in 65 job losses.

Fisher & Paykel Healthcare dropped 0.6% to $36.95, while a2 Milk Company rose 0.8% to $21.28.

Ryman Healthcare fell for its third consecutive session, dropping 1% to $12.77, down 2.5% this week. The retirement village company has operations in Victoria, Australia, which has seen a resurgence of Covid19 and a strict new lockdown.

Sky Network Television posted yesterday’s biggest gain, up 2.4% at 13 cents, followed by SkyCity Entertainment group which was up 2.1% at $2.48.

Outside the top 50, Pacific Edge dropped 5.2% to 73 cents after holding its annual general meeting yesterday afternoon.

Meanwhile, the New Zealand dollar traded at A92.42c from A92.71c on Tuesday, J¥70.15 from J¥70.11, ¤56.22c from ¤56.16c, UK50.74p from UK50.55p, and C¥4.6191 from C¥4.6161. — BusinessDesk