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The Markets

NZ shares join global decline; US tariff move weighs on exporters

New Zealand shares joined a global sell-off as a revival in US trade protectionism added to pessimism among global investors. Local exporters were among the hardest hit as a stronger kiwi dollar combined with the souring sentiment.

Tuesday, December 3rd 2019, 6:21PM

by BusinessDesk

The S&P/NZX 50 Index dropped 73.71 points, or 0.7 percent, to 11,228.27. Within the index, 27 stocks fell, 16 rose, and seven were unchanged. Turnover was $173.3 million.

Stocks across Asia fell, taking their cue from Wall Street where weaker US manufacturing data set a downbeat tone that was compounded by President Donald Trump’s imposition of steel and aluminium tariffs on Brazil and Argentina. Hong Kong’s Hang Seng dropped 0.2 percent in afternoon trading, while Australia’s S&P/ASX 200 Index was down 2.3 percent and South Korea’s Kospi 200 Index fell 0.6 percent.

“The US President imposed tariffs on Brazilian and Argentinian steel and aluminium in a shock overnight move that rattled investment markets,” CMC Markets chief market strategist Michael McCarthy said in a note.

“The move followed weaker manufacturing data in Europe and the US and compounded already weak sentiment. Shares and bonds were hit hard, and the US dollar fell.”

That negative tone helped push the New Zealand dollar to its highest level since August as the greenback was caught up in the sell-off, which weighed on local exporters.

A2 Milk led the market lower, down 3.3 percent at $15.20 on a volume of 1.2 million shares, more than its 90-day average of 794,000, while Fisher & Paykel Healthcare was down 3.2 percent at $21.30. The two exporters have been among the best performers on the benchmark index, which has been the pick of the major indices across Asia so far this year, with a 27.4 percent gain in the year-to-date.

Australia’s market was hit even harder with the ASX 200 posting the biggest fall across Asia. The Reserve Bank of Australia kept the target cash rate at 0.75 percent today, with governor Philip Lowe saying the economy had passed a gentle turning point and that the board wanted more time to see how the current low rates played out.

The dual-listed banks were weaker, with Westpac Banking Corp down 1.8 percent at $25.54 and Australia & New Zealand Banking Group falling 2.3 percent to $25.80.

The Reserve Bank of New Zealand is scheduled to unveil its decision on capital requirements on Thursday. Heartland Group decreased 0.6 percent to $1.67.

Gentrack extended its recent decline, falling 1.3 percent to $3.70. The utilities software developer traded on an unusually large volume of 1.1 million shares, almost 10 times its 111,000 average.

Meridian Energy rose 4.1 percent to $4.82 on a volume of 2.7 million shares, more than its 1.9 million average. Meridian, Contact Energy and grid operator Transpower agreed to fast-track an upgrade to the lower grid to reduce any impact of a reduction in production if the Tiwai Point smelter were to close.

Grant Davies, an investment adviser at Hamilton Hindin Greene, said the upgrade gave a strong signal to Rio Tinto – the smelter’s controlling shareholder – and paved the way for the South Island’s two biggest generators to shift electricity north if need be.

“If the smelter was to close, they want to be in a position they can rearrange the deck chairs and lessen the impact,” he said.

“The signalling to Rio Tinto is that they’re prepared to continue life without them.”

Contact was unchanged at $7.10, while Genesis Energy decreased 0.2 percent to $3.19 on a volume of 1 million shares, almost twice its 531,000 average. Mercury NZ increased 1.6 percent to $4.90 on a volume of almost 4 million shares, more than twice its 1.8 million average.

Property For Industry increased 0.4 percent to $2.335 after saying the value of its portfolio was expected to rise 9.6 percent in 2019.

Vector was unchanged at $3.56. It said it had agreed to sell its Kapuni gas plant to partner Todd Petroleum in a deal that may provide longer-term payments linked to the field’s production.

Of other stocks trading on volumes of more than a million shares, Spark New Zealand was unchanged at $4.48, Chorus increased 0.1 percent to $6, Argosy Property was unchanged at $1.40, Kathmandu Holdings slipped 0.7 percent to $3.03, Precinct Properties New Zealand increased 0.3 percent to $1.805, Auckland International Airport decreased 1.7 percent to $8.85 and Fletcher Building decreased 0.6 percent to $5.16.

Outside the benchmark index, Delegat Group increased 0.6 percent to $11.06 after telling shareholders at today’s annual meeting that it was on track to lift case sales and deliver an operating profit in line with expectations.

Tags: Market Close

« Five day streak of gains ends; Gentracks leads market lowerNZ shares dip on eve of major regulatory decisions »

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Lender Flt 1yr 2yr 3yr
ANZ 5.19 4.05 ▲4.05 4.49
ANZ Special - 3.55 ▲3.55 3.99
ASB Bank 5.20 3.89 4.05 4.39
ASB Bank Special - 3.39 3.55 3.89
BNZ - Classic - 3.49 3.45 3.99
BNZ - Mortgage One 5.90 - - -
BNZ - Rapid Repay 5.35 - - -
BNZ - Std, FlyBuys 5.30 4.45 4.35 4.55
BNZ - TotalMoney 5.30 - - -
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China Construction Bank Special - 3.19 3.19 3.19
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Credit Union Auckland 5.95 - - -
Credit Union Baywide ▼5.65 ▼4.75 ▼4.75 -
Credit Union North 6.45 - - -
Credit Union South ▼5.65 4.75 4.75 -
Finance Direct - - - -
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Heartland 6.70 7.00 7.25 7.85
Heartland Bank - Online - - - -
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HSBC Premier LVR > 80% - - - -
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HSBC Special - - - -
ICBC 5.15 3.18 3.18 3.20
Kainga Ora 5.18 4.04 3.95 4.39
Kiwibank 5.80 4.14 4.30 4.64
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Kiwibank - Offset 5.15 - - -
Kiwibank Special - 3.39 3.55 3.89
Liberty 5.69 - - -
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Pepper Money Near Prime 5.64 - 5.44 5.44
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The Co-operative Bank - Standard 5.15 3.99 4.09 4.39
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TSB Special 5.29 3.55 3.45 3.89
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Last updated: 4 December 2019 9:11am

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