by BusinessDesk
The S&P/NZX 50 Index fell 13.64 points, or 0.1 percent, to 12,070.83. Within the index, 33 stocks fell, 11 rose and six were unchanged. Turnover was $123.8 million.
Investors are bracing for the likelihood the US presidential election will be contested. This is because of a change in voting behaviour due to covid-19 will mean votes will take much longer to count than in previous years.
ASB economist Chris Tennent-Brown said the significant fall in share markets last week - the worst since the March meltdown - was partly due to financial markets pricing in this uncertainty.
Rising covid cases and their economic consequences in the US and Europe have also been weighing on the outlook.
Jeremy Sullivan, an investment advisor at Hamilton Hindin Greene, said there was downward pressure across the board as few investors were putting money into the market ahead of the contentious vote.
“It certainly has some potential for civil unrest, and everyone is very concerned with how things are going to play out,” he said. “A lot of people will be sitting on cash and waiting for the outcome.”
Local lender Heartland Group Holdings led the market lower, falling 5.2 percent to $1.27.
Its decline may have been influenced by a weak earnings result from Westpac NZ, which today reported annual profit down 43 percent due to increased bad debt provisioning and rising expenses.
Westpac NZ’s parent company Westpac Banking Corp fell just 0.8 percent to $18.95, while Australia & New Zealand Banking Group rose 1.4 percent to $20.40.
The index saw widespread losses.
Pacific Edge was hard-hit, losing 4.2 percent at 69 cents, Tourism Holdings declined 3.6 percent to $2.16 and Pushpay Holdings was down 3.3 percent to $8.80. All three companies have operations in the US.
Fisher & Paykel Healthcare rose 2.9 percent to $36, bouncing after a 5.4 percent decline on Friday as investors weighed what impact the rising number of virus cases in Europe and the US might have on the medical device manufacturer’s earnings.
“People are thinking Fisher & Paykel is going to be able to benefit from the pandemic for a longer period of time than previously announced,” Sullivan said.
Some domestic stocks also outperformed as investors sought investments insulated from international uncertainty. Fletcher Building rose 2.7 percent to $4.21, Freightways advanced 2.4 percent at $8.60 and Meridian Energy climbed 1.5 percent to $5.38.
The search for safety also drove currency traders away from the kiwi dollar and towards the greenback.
“The usual pattern in times of uncertainty played out, with the NZD easing against the USD. Nonetheless, the NZD remains just above 66 cents, well off the lows of the last three months,” ASB’s Tennet-Brown said.
The kiwi dollar was trading at 66.02 US cents at 5pm in Wellington, down from 66.34 cents on Friday.
The trade-weighted index was at 71.17 at 5pm, from 71.36 on Friday. The kiwi traded at 94.14 Australian cents from 94.06 cents, 69.11 yen from 69.26 yen, 56.72 euro cents from 56.74 cents, 51.07 British pence from 51.29 pence, and 4.4147 Chinese yuan from 4.4326 yuan.
| « F&P Healthcare profit-taking drags NZX 50 down | Australian rate cut fuels NZ shares » |
Special Offers
No comments yet
Sign In to add your comment
© Copyright 1997-2024 Tarawera Publishing Ltd. All Rights Reserved