Growth stocks lead NZX 50 lower

New Zealand's share market fell half a percent Friday, but the benchmark equity index still finished the week up 1.8% as it bounced back from a sell-off when Russia first invaded Ukraine.

Friday, March 4th 2022, 6:27PM

by BusinessDesk

The S&P/NZX 50 Index fell 70 points, or 0.6%, to 12,141.77. Turnover was $163 million.

Investors have remained focused on the financial implications of the war in Ukraine which threatens to exacerbate inflation.

Commodity prices took another sharp lead overnight. The S&P GSCI index of global raw material prices was up 18% this week – the fastest weekly rise on record.

Michael McCarthy, chief strategy officer at Tiger Brokers Australia, said investors globally were concerned about slowing economic growth and inflationary pressures that tie the hands of central bankers.

Interest rates are expected to keep climbing until inflation is quelled, even if global economic activity slows first.

Many fund managers are focusing on “value-style” investments which generally means moving cash out of speculative growth stocks and into companies with more steady earnings.

Growth stocks led the local index lower today: Pacific Edge dropped 4.2% to 91 cents, Vista Group fell 3.5% to $1.93, and Eroad was down 1.9% at $3.72.

Plexure Group continued its almost 18-month long slide, falling another 4.6% to 31 cents, and Serko dropped 1.4% to $4.83.

Serko shares are down 30% this year, but Fisher Funds is still backing the firm and has bought $8m of shares since December, which brings its total shareholding to almost 7%.

NZX-listed oil stocks gave back some gains today: NZ Oil & Gas fell 5.6% to 51 cents – it has been up as much as 8.5% during the crisis – and NZ Refining was down 2% at $1.

Retailers had a good day, with Briscoe Group up 2.7% at $6 and Kathmandu Holdings up 2.3% at $1.36.

Kathmandu Holdings today announced it will change its company name to KMD Brands to match its stock ticker. The company will continue trading under the Kathmandu brand.

In currency markets, the Russian ruble collapsed to a new low. It is now trading at 108 rubles to a single US dollar, down about 30% since the invasion.

The NZ dollar held onto its recent gains – despite the US dollar being in demand – and was trading at 67.71 US cents on Friday, down only slightly from 67.77 yesterday.

“The kiwi continues to run the gauntlet between deteriorating risk appetite on one hand and higher commodity prices on the other,” said ASB economist, Mike Jones.

Tags: Market Close