Fading blue chips take the heat out of prices

Persistent selling in the blue chip stocks Fisher and Paykel Healthcare and a2 Milk has taken some of the heat out of the New Zealand sharemarket, closing the week more than 1 per cent down after a late dive.

The S&P/NZX 50 finished at 11,633.52, a fall of 143.61 points or 1.22 per cent on trade of 152.37 million shares worth $441.24 million. Half the fall was in the last hour of busy trading. There were 55 gainers and 85 decliners over the whole market.

Jeremy Sullivan, investment adviser with Hamilton Hindin Greene, said “the unwinding” of Covid trades in the blue chips had continued.

“Investors are quite worried, in a2’s case, about China trade sanctions and, in Fisher and Paykel’s case, the potential of a vaccine rollout — and they are taking some profit off the table,” Sullivan said.

Fisher and Paykel fell 20c to $32.25 on trade worth $52.6m, after not long ago reaching $37.68. At the same time, a2 Milk has fallen from $21.50 in mid-August to $17.70, down 18c at the close of trading.

Other leading market cap stocks to fall were Ryman Healthcare, down 40c to $13.60 with $13m worth of shares changing hands; Spark down 11.5c or 2.45 per cent to $4.57 on trade worth $29.7m; and Mainfreight losing 40c to $45.90.

Utilities investor Infratil gained 7c to $4.97, and fishing company Sanford surged 20c or 3.59 per cent to $5.77.

Sanford was the subject of two substantial shareholding notices – Masfen Securities increased its stake to 6.3 per cent, and Tasman Equity and Arden Capital to 7.1 per cent. Auckland International Airport, which has joined the S&P/ASX 200, fell 18c or 2.53 per cent to $6.93. It earlier reported that passenger volumes worsened in August.

Tourism Holdings climbed 21c or 9.81 per cent to $2.35 after reporting a betterthan-expected full-year result. The company reached $400.93m in revenue for the year ending June, down 5 per cent from the previous $423m and its profit slipped 8 per cent to $27.35m.

SkyCity is spending $35m upgrading its Auckland casino, and its share price fell 11c or 3.72 per cent to $2.85.

In the US, leading indices fell as investors became nervous over the economic outlook. Latest figures showed weakness in the labour market, and Federal Reserve chairman Jerome Powell said the outlook is “highly uncertain.” The central bank is keeping interest rates near zero through to 2023.

The Dow Jones Industrial fell 0.47 per cent to 27,901.98 points, the S&P 500 was down 0.84 per cent to 3357.01 and the Nasdaq Composite had the biggest fall, down 1.27 per cent to 10,910.28.