Market commentary

WELLINGTON: The New Zealand sharemarket’s stellar run came to a crushing halt, falling nearly 1% as investors became concerned that the Delta Covid outbreaks may slow economic growth.

The S&P/NZX 50 Index slid from a morning high of 13,324.92 to close at 13,193.01, down 128.98 points or 0.97%, its first fall in nine days.

There were 57 gainers and 82 decliners over the whole market on trade of 48.28 million share transactions worth $197.84 million.

Matt Goodson, managing director of Salt Funds Management, said slowing economic growth and rising inflation could be a tricky combination.

‘‘Bond yields have again gone up because of the inflationary pressures everywhere. The US Federal Reserve has suggested the pressures are temporary but the inflationary drivers look like being permanent.

‘‘With our inflation at or over the Reserve Bank's topend target of 3% and bond yields nearing 2%, noone is going to get rich out of that,’’ Mr Goodson said.

The New Zealand 10 Year Government Bond yield increased to 1.938%, increasing the prospect of the Reserve Bank lifting the official cash rate next month.

The higher bond yield hit the interest ratesensitive property stocks. Argosy fell 5.5c to $1.665, Property for Industry and Goodman Property Trust both shed 3.5c to $2.99 and $2.53 respectively, Kiwi Property was down 1.5c to $1.155 and Precinct Properties slipped 1c to $1.705.

But Vital Healthcare Property Trust increased 4.7c to $3.205, and Stride was up 1c to $2.66.

The leading retirement village operators were weaker, Ryman Healthcare declining 50c to $15.11 and Summerset Group Holdings falling 26c to $15.14.

Market leader Fisher and Paykel Healthcare was down 87c to $33, Mainfreight shed 90c to $94.20, Ebos Group declined 23c to $34.77, Contact Energy decreased 5c to $8.04, Infratil lost 10.5c to $7.445 and a2 Milk fell 18c to $5.75.

Synlait Milk told the market it was reorganising its business and its share price was down 1c to $3.16.

Fletcher Building was down 1c to $7.47 as four of its factories in Auckland fired up to supply muchneeded products to construction sites around the country.

Other blue chips remained strong. Auckland International Airport was up 6c to $7.39, Meridian gained 3c to $5.17, Mercury also increased 3c to $6.68 and Vector rose 8.5c or 2.06% to $4.22. Delegat Group increased 19c to $14.79.

DGL Group climbed 11c to $2.80, Seeka rose 12c to $5.46, Pacific Edge fell 4c to $1.45, after dismissing market speculation that it was planning a capital raise. Instead, the cancer diagnostic firm said it is focusing on its dual listing on the Australian Stock Exchange. —