by BusinessDesk
The S&P/NZX 50 Index fell 186.13 points, or 1.5%, to 12,329.09. Within the index, 26 stocks fell, 18 rose and six were unchanged. Turnover was $147.5 million.
Renewable energy stocks led the index’s sharp decline, bucking the sector’s reputation as being a reliable – and even boring – place to invest.
Meridian Energy dropped 6.3% to $5.245 with 4 million shares, worth more than $25m, changing hands.
“Meridian Energy is a boring old utility, it used to go up or down half a percent on a bad day and now 5% is the new normal for this thing,” said Jeremy Sullivan, an investment advisor at Hamilton Hindin Green.
Contact Energy declined 4.5% to $6.75 and Mercury NZ – which last week bought more wind farms from Tilt Renewables – was down 5.3% at $6.20.
Dow Jones is reviewing a clean energy index, that includes Contact and Meridian, after it experienced a liquidity shock in January that resulted in dizzyingly high share prices.
The latest consultation document suggests changing the criteria to add 70 stocks to the existing 30 in the index.
Elsewhere on the index, investors seemed to trade on less important market announcements in the absence of proper market sensitive news.
Synlait Milk posted the day's biggest loss, falling 7.4% to $3.75. The milk processor today announced its director of operations, Mark Toomey, will leave the company in June.
However, Sullivan said a single senior manager departing wasn’t significant enough to prompt a large price fall. Volume was very light with only 150,000 shares traded.
Similarly, travel software company Serko saw the day’s largest gain after it said travel bookings through its platform had increased during March and it was now averaging 68% of pre-pandemic transaction volumes.
The firm had previously said it had prepared for volume to be anywhere between 30% to 70% by March – so the announcement was within guidance – but shares still climbed 4.8% to $6.37.
Travel stocks had little reaction to the news the government would announce the date of a trans-Tasman travel bubble in April.
Auckland International Airport fell 0.3% to $7.55, despite being expected to be one of the biggest beneficiaries of the bubble, and Air New Zealand dropped 2.2% to $1.80.
Sullivan said investors were sceptical about the announcement, as there has been talk of opening a bubble since mid-last year. “It is a bit like the boy who cries wolf,” he said.
The kiwi dollar was trading 71.58 US cents at 5pm in Wellington, down slightly from 71.65 cents on Friday.
The trade-weighted index was at 74.76 at 5pm, from 74.83 on Friday. The kiwi traded at 92.57 Australian cents from 92.52 cents, 77.84 yen from 78.03 yen, 60.15 euro cents from 60.14 cents, 51.66 British pence from 51.49 pence, and 4.6538 Chinese yuan from 4.6646 yuan.
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