Middle East conflict casts a shadow across markets

The Iranian attack on Israel sent nervous sharemarkets tumbling around the world – and New Zealand was no exception though it recovered boldly in the afternoon.

Monday, April 15th 2024, 6:36PM

by BusinessDesk

The S&P/NZX 50 Index closed at 11,916.78, down 14.53 points or 0.12%, after reaching a morning low of 11,790.86 (or down 1%).

There were 93 decliners and 38 gainers over the whole market on light volumes of 32.77 million share transactions worth $85.98 million.

Jeremy Sullivan, investment adviser with Hamilton Hindin Greene, said the deterioration of conditions in the Middle East affected the markets but “confidence returned throughout the session in our market”.

“The [listed] Volatility Index in the United States increased more than 16% to a six-month high. We were the first market to open following the attack and there was no panic selling.

“The market made good ground in the afternoon which showed it was taking the geopolitical instability in its stride,” Sullivan said. “The NZ dollar fell [to US59.44c] against the American greenback and this has helped stocks like Fisher and Paykel Healthcare.”

The US markets fell sharply over the weekend in anticipation of the Iran drone and missile attack on Israel. The Dow Jones Industrial Average was down 1.24% to 37,983.24 points; S&P 500 declined 1.46% to 5123.41; and Nasdaq Composite eased 1.62% to 16,175.09.

Across the Tasman, the S&P/ASX 200 Index was down 0.49% to 7749.8 points at 6pm NZ time. The Hong Kong Hang Seng Index had fallen 0.52% to 16,635.24 points, and the Japanese Nikkei 225 was down 0.91% to 39,163.01.

Sullivan said the Reserve Bank adjusted its official cash rate "neutral" projection to 3.9%, from 4%, when it removes its restrictive monetary policy stance and the rate begins falling.

The March quarter consumer price index, released on Wednesday, is expected to show annual inflation eased to 4%, from 4.7% at the end of December, but still above the Reserve Bank forecast of 3.8%.

Stats NZ reported that food prices increased 0.7% in the year ending March, the smallest rise since April 2021. It was significantly lower than the 12.1% annual increase in March last year.

Market leader and exporter Fisher and Paykel Healthcare was one of the few gainers, increasing 40c to $26.63.

On the market

Ebos Group added 39c to $35.50; Fletcher Building was up 5c to $3.95; Auckland International Airport gained 6c to $8.09; Tower rose 2.5c or 3.52% to 73.5c; and Seeka increased 6c or 2.05% to $2.98.

Gentrack eased 18c or 2.12% to $8.30; a2 Milk shed 8c to $6.28; Skellerup declined 9c or 2.05% to $4.30; Vista Group decreased 4c or 2.03% to $1.93; AFT Pharmaceuticals fell 13c or 4.02% to $3.10; Serko was down 10c or 2.86% to $3.40; and Smartpay was down 5c or 3.42% to $1.41.

In the retail sector, Briscoe Group declined 10c or 2.15% to $4.55; Hallenstein Glasson was down 8c to $6; KMD Brands shed 2c or 3.45% to 56c; and The Warehouse was up 3c or 2.07% to $1.48.

Among port companies, Napier was down 7c or 2.98% to $2.28, Tauranga declined 6c to $5.07, while Marsden Maritime Holdings and South Port NZ were both up 5c to $4.15 and $5.90 respectively.

Manawa Energy was down 1c to $4.64 after reporting a 31% fall in hydro generation production for the fourth quarter, compared with the previous corresponding period, because of the planned Waipori scheme outage and lower-than-average inflows.

Manawa’s storage at the end of March was 83% of average, and the full-year production volume was steady at 1,901GWh.

Oceania Healthcare declined 3c or 4.69% to 61c after reporting a 20% rise in new sales and 14% increase in resales for the 12 months ending March compared with the previous year. Oceania completed 182 new units and will deliver a further 224 units in the 2025 financial year.

Cooks Coffee, unchanged at 27c, increased sales by 17.6% to $58.2m for the year ending March, with British stores up 21.1% to $38.3m and Ireland up 11.3% to $19.9m. Cooks has 77 sites, up from 66 in the previous year.

Blackpearl Group, down 1c to 69c, told the market that subscription revenue for the year ending March reached $1.3m and annual recurring revenue was $7.4m.

Tags: Market Close