Sea of red as NZ index gets Wall St blues

Kiwi dollar nears two-year low as US fall hits local shares

A further plunge on Wall Street dragged the New Zealand sharemarket down nearly 1 per cent and its confidence will be further tested this week by central bank meetings and more interest rate hikes overseas.

The S&P/NZX 50 Index fell at the opening after the renewed United States sell-off over the weekend and it never recovered, finishing down 99.94 points, or 0.84 per cent, to 11,784.36. The index has fallen nearly 10 per cent this year.

There were 103 decliners and 30 gainers on the market, and trading was light with 28.48 million shares worth $96.1 million changing hands.

The NZ dollar reached a near twoyear low against the rising American greenback, trading at US64.27c — a bonus for New Zealand exporters but imported goods will cost more.

Mark Lister, head of private wealth research for Craigs Investment Partners, said the fall on the local market was not unexpected given the ugly Friday in the United States — and then “we had some soft Chinese economic data on the back of their lockdown as they box on with their zero Covid policy.”

He said other international economic developments this week will affect the New Zealand market. The Australian Reserve Bank, US Federal Reserve and Bank of England are all meeting, and it’s likely to be more of the same — interest rates rising.

About 80 per cent of S&P 500 companies have beaten quarterly earnings expectations in the current reporting season, but on the troubled Nasdaq Composite big tech companies Amazon, Apple and Intel fell on reports of slowing growth.

Amazon was down 14.05 per cent to US$2485.63 ($3866.87), its biggest drop since 2006.

It sent the Nasdaq down 4.17 per cent to a new 2022 low of 12,334.64 points and the index fell 13.3 per cent in April — its worst monthly performance since October 2008 during the global financial crisis.

The Dow Jones Industrial Average declined 2.77 per cent to 32,977.21 points, and the S&P 500 fell 3.63 per cent to 4131.93. The Nasdaq is nearly 25 per cent below its all-time high, the S&P 500 down 14.3 per cent and the Dow Jones 10.8 per cent lower.

Many of the established New Zealand stocks were weaker. Fisher & Paykel Healthcare was down 15c to $21.35; Ebos Group declined 55c to $41.85 and a2 Milk continued its slide, down 11c or 2.24 per cent to $4.81.

Mercury has completed the $467m purchase of Trustpower’s retail business and will double its customer electricity, gas, fixed and wireless broadband and mobile phone connections to 787,000. Mercury, unchanged at $6.06, also launched $200m worth of capital bonds with the ability to accept $50m oversubscriptions.

Amongst the few gainers, Hallenstein Glasson gained 6c to $6.08; T&G Global was up 5c to $2.95; and Eroad improved 6c or 1.91 per cent to $3.20.

Vital Healthcare Property Trust, down 8.5c or 2.72 per cent to $3.035, completed its 1 for 8.54 entitlement offer, raising $109.8m representing 37.2m new units. Eligible institutional unit-holders took up 98 per cent of their entitlements.