Blue-chips fall as market retreats from record

The S&P/NZX 50 index fell back below

10,000 after becoming the most expensive across Asia based on forward-looking measures. Blue-chip stocks including Spark, Goodman Property Trust and Ryman Healthcare were among those sold down yesterday.

The benchmark index fell 77.17 points, or

0.8 per cent, to 9994.57. Within the index, 33 stocks fell, seven rose and 10 were unchanged. Turnover was $124.7 million.

The NZX50 broke through the 10,000 level this week. The index is up 14 per cent so far this year, with the prospect of low interest rates lasting for even longer supporting demand for companies offering reliable dividends. That has helped push the likes of Chorus, Meridian Energy, Mercury NZ and Genesis Energy to records.

The utilities were mixed yesterday, with Meridian posting the biggest gain on the day, up 1.2 per cent at $4.14 on a volume of 1.1 million shares. Chorus was up 0.2 per cent at $6.255, Genesis fell 0.7 per cent to $3.07 and Mercury was down 1.7 per cent at $3.80.

The average dividend yield on the NZX50 is the third-highest among Asia-Pacific benchmark indices tracked by Refinitiv, however, a forward price-to-earnings ratio of 22.65 makes the local bourse the most expensive in the region.

Greg Smith, head of research at Fat Prophets, said the holidays had affected trading this week with a lot of people taking leave around the Easter and Anzac Day holidays to extend their break.

That left the local market following international leads. While strong US earnings had supported stocks, the upcoming US GDP reading will be closely watched to see if the economic data backs up corporate results.

“That could give a bit of a lift to our market next week. The NZX50 has gone through the 10,000 mark and that will be a guide to see whether it will hold,” said Smith.

Ryman led the market lower, down 3.3 per cent at $11.89 on a volume of 640,000 shares, more than its 444,000 three-monthly average. Goodman Property Trust dipped 0.3 per cent to $1.725 on a volume of 3.4 million units, more than fivetimes its 90-day average of 608,000.

Spark New Zealand dropped 2.3 per cent to $3.585 on a volume of 5.8 million shares and was the most traded stock on the market. The telecommunications company attracted more criticism over an outage on its new sports streaming platform during the transtasman Anzac Day hockey test.

Sky shares fell 2.4 per cent to $1.24 on a volume of 780,000.

Of other companies trading on volumes of more than a million shares, Contact Energy rose 0.6 per cent to $6.75 and Kiwi Property Group increased 1 per cent to $1.525.