Investors keep wary eye on gathering storm

The New Zealand sharemarket joined the wild global rollercoaster ride with a fall of more than 1 per cent as analysts and investors wondered whether recession was fast approaching.

After another volatile day on Wall Street, the S&P/NZX 50 Index fell 134.32 points or 1.2 per cent to 11,065.71.

The index finished a tumultuous shortened week down 3.26 per cent and has fallen nearly 15.5 per cent so far this year.

There were 92 decliners and 48 gainers on the main board, with 59.98 million shares worth $229.17m changing hands following end-of-quarter rebalancing.

Shane Solly, portfolio manager with Harbour Asset Management, said some people are comparing the current situation with the 2002 tech wreck, the 2008 global financial crisis and the Asian currency crisis.

“There may be some elements there, but it’s not like those events. It’s different and the liquidity in the markets is pretty good.

“We have seen a brutal correction with a period of violent trading. The dysfunction in the capital markets has been triggered by the UK activity,” Solly said.

“There’s a lot of analyst scrutiny taking place at the moment into companies whose balance sheets may be stretched to deal with tough times. Most of the large New Zealand companies are in pretty good financial order.”

In the United States, the Dow Jones Industrial Average was down 1.54 per cent to 29,225.61 points; the S&P 500 declined 2.11 per cent to 3640.47; and the Nasdaq Composite fell 2.84 per cent to 10,737.51.

At home, leading stocks were again hit. Fisher & Paykel Healthcare reached a new low, falling 70c or 3.65 per cent to $18.50; Auckland International Airport was down 29c or 3.87 per cent to $7.20; Ebos Group declined $1.23 or 3.17 per cent to $37.61; and Spark decreased 10.5c or 2.06 per cent to $5.

Mainfreight fell $1.50c or 2.18 per cent to $67.40; Chorus was down 5.5c to $7.60; Infratil declined 16.5c or 1.87 per cent to $8.65; and Fletcher Building decreased 13c or 2.62 per cent to $4.84.

Among the energy companies, Contact was down 7c to $7.48; Meridian declined 5c to $4.80; and Vector lost 11c or 2.65 per cent to $4.04.

There was a recovery in the hard-hit property sector. Stride rose 9c or 5.7 per cent to $1.67; Goodman Property Trust was up 4c or 2.04 per cent to $2; Argosy increased 2.5c or 2.13 per cent to $1.20; and Precinct gained 3c or 2.36 per cent to $1.30.

Freightways, down 5c to $9.80, has completed the A$160m ($181.69m) purchase of Australia’s Allied Express Transport.