Big energy stocks end week on a down note

Asofter New Zealand sharemarket closed the week with an 0.51 percentage point fall, dragged down by the big three energy stocks as longterm interest rates climbed.

The S&P/NZX 50 Index fell sharply at the opening and finished on 11,140.4, down 57.25 points or 0.51 per cent. The index was slightly ahead for the week thanks to the 1.3 per cent surge on Monday and has now fallen less than 3 per cent so far this year.

There were 46 gainers and 74 decliners over the whole market on very light trading of 22.42 million shares worth $49.38m.

Shane Solly, portfolio manager with Harbour Asset Management, said the market took two steps forward and then today, one step back.

“We had [US Federal Reserve chair] Jerome Powell warning that more work may be needed to bring down inflation, and the NZ Purchasing Managers’ Index was pretty weak, suggesting a downside risk with the slowing economy. And we rip into the reporting season next week. It added up to a soft ending for the week,” Solly said.

In the US the S&P 500 ended an eight-day winning streak, falling 0.81 per cent to 4347.35 points; the Nasdaq Composite was down 0.94 per cent to

13,521.45; and the Dow Jones Industrial Average declined 0.65 per cent to 33,891.94.

The US 10-Year Treasury Note yield increased 12 basis points to 4.634 per cent after Powell spoke to the International Monetary Fund, and the NZ 10-Year Government bond climbed 11.5 basis points to 5.132 per cent, affecting rate-sensitive stocks.

Meridian Energy, the biggest local stock by market capitalisation, was down 17c or 3.31 per cent to $4.96; Mercury declined 11c or 1.84 per cent to $5.88; and Contact shed 21c or 2.62 per cent to $7.82. Manawa, however, was up 9c or 2.02 per cent to $4.55.

Ebos Group declined 31c to $37.20; Freightways was down 20c or 2.5 per cent to $7.80; and Investore decreased 4c or 3.42 per cent to $1.13.

Napier Port, which reports its latest earnings next week along with Manawa and Investore, was down 3c to $2.22; Restaurant Brands declined 8c or 2.23 per cent to $3.51; Rakon shed 2c or 2.74 per cent to 71c; and Westpac Bank decreased 49c or 2.13 per cent to $22.52. Mainfreight recovered a further 34c to $63.15 as analysts upgraded earnings forecasts. Oceania Healthcare was up 2c or 2.86 per cent to 72c; PGG Wrightson gained 6c or 1.8 per cent to $3.40; and Serko added 5c to $4.41.

KMD Brands, down 2c or 2.3 per cent to 85c, told shareholders at its annual meeting that progress towards working capital being 18 per cent of group sales is expected to drive strong cash flow in the second half. KMD said first-half results are dependent on the key Black Friday (mid-December) and Christmas trading periods.