Share prices slide as NZ joins global sell-off

New Zealand shares fell as stock markets across Asia followed Wall Street’s lead. Investor optimism in the US was brought to a halt by pessimistic economic outlooks and a growing number of new Covid-19 cases in some states.

The S&P/NZX 50 index dropped 248.99 points, or 2.2 per cent, to 10,905.94. Within the index, 47 stocks fell, one rose, and two were unchanged. Turnover was $202.9 million.

The stare-down between resurgent stock markets and waning economies broke overnight on Thursday. Wall Street investors were the first to blink after the US Federal Reserve gave dire economic forecasts and as new Covid-19 cases increased in three states.

The major US benchmark indices dropped more than 5 per cent overnight and Asian markets followed. The NZX 50 fell 4.5 per cent when local trading opened, but recovered throughout the day.

“Markets have effectively released some steam after pretty exuberant times,” said Brad Gordon, an investment adviser at Hobson Wealth.

Sky Network Television led the local market, falling 11.1 per cent to 16c. The payTV operator completed the retail component of a $157 million capital raising at 12c apiece.

After trading closed, S&P announced changes to the NZX 50, with Gentrack leaving the benchmark index and Napier Port joining it. Gentrack fell 4.2 per cent to $1.60, while Napier Port declined a more modest 0.3 per cent to $3.53.

Retail and travel stocks, which had been driving the wave of recovery in recent weeks, bore the brunt of the day’s decline.

Vista Group International fell 7.8 per cent to $1.66, Kathmandu Holdings declined 6.7 per cent to $1.11, SkyCity Entertainment Group fell 5.5 per cent to $2.75.

Air New Zealand fell 2.4 per cent to $1.62. Gordon said the airline’s swiftly rising share price over recent weeks had “defied all common sense”.

Auckland International Airport dropped 4 per cent to $6.48 and Tourism Holdings decreased 1.3 per cent to $2.31.

Refining NZ fell 4.5 per cent to 85c and Z

Energy declined 3 per cent to $2.95. Both stocks have been hit by dramatically reduced demand for fuel.

Westpac Banking Corp dropped 4.1 per cent to $18.98, Australia & New Zealand Banking Group declined 3.5 per cent to $20.19 and Heartland Group fell 3.7 per cent to $1.31.

Ryman Healthcare fell 1.5 per cent to $12.85, and Precinct Properties fell 2.1 per cent to $1.625. It paid a third-quarter dividend of 1.575c yesterday and said it is confident of meeting full-year dividend guidance of 6.3c.