NZ shares surrender yesterday’s gain

New Zealand shares gave back all of Thursday’s bounce in a broad-based selloff that was avoided by only a handful of stocks.

Friday, July 30th 2021, 7:10PM

by BusinessDesk

The S&P/NZX 50 Index fell 134.33 points, or 1.1%, to 12,594.52. Turnover was $245 million.

Almost every stock in the index declined today as investors walked back the more than 1% bounce yesterday after a string of positive market updates got sentiment up.

Leading the fall was A2 Milk, down another 4.6% at $6.22 today, having enjoyed a brief reprieve from sustained selling yesterday. The stock is now down more than 16% in recent months.

Mainfreight and Ryman Healthcare both held upbeat annual general meetings yesterday and got share price bumps to match.

Today, some Mainfreight investors took a profit pushing the stock back 1.2% to $82, while Ryman continued to move higher, up a further 1.8% to $13.18.

Outside of the top 50 stocks, TIL Logistics Group was up another 6.2% at $1.54. The logistics firm has been turning heads with plans to rebrand and two former Mainfreight executives joining their team.

The sharemarket’s dour mood reflected ANZ’s business survey which recorded business confidence and the activity outlook dipping during July, although it remains at a high level.

More importantly inflation expectations made a strong appearance, with pricing intentions and expected costs at, or near, record highs.

This will encourage the Reserve Bank to go ahead with an increase to the official cash rate as soon as August, said ASB economist Mark Smith.

Property stocks, which are sensitive to interest rates, were widely weaker today. Precinct Properties dropped 3% to $1.60, Arvida Group declined 2.8% to $2.06, and Oceania Healthcare was down 2.6% at $1.49.

Bucking the trend was Argosy Property which rose 0.3% to $1.63 after extending $215m of its existing syndicated bank facilities by a year and reducing total debt facilities by $35m to $455m.

Fisher & Paykel Healthcare was a drag on the index, falling 1.9% to $31.55.

Z Energy’s share price fell 1.7% to $2.95 as excitement around a possible takeover receded.

The fuel retailer’s directors are being coy over speculation it could be the subject of a takeover bid, with its share price remaining below analysts' best expectations.

"Although we have discussions with other parties and actively consider opportunities that may arise from time to time, there is nothing in this area which requires disclosure,” they said.

Investors in the US were surprised by weaker economic data, leaving them speculating the Federal Reserve will be slow to tighten monetary policy.

This counter-intuitively set a risk-on tone among markets which are being supported by current policy. The US dollar declined as traders sought out riskier assets, bolstering our local currency in comparison.

The kiwi dollar was trading at 70.01 US cents by 3pm in Wellington, up from 69.54 cents yesterday.

The trade-weighted index was at 74.13 at 3pm, from 73.82 yesterday. The kiwi traded at 94.74 Australian cents from 94.41 cents, 76.64 yen from 76.32 yen, 58.92 euro cents from 58.69 cents, 50.18 British pence from 49.97 pence, and 4.5218 Chinese yuan from 4.5096 yuan.

Tags: Market Close