INDEPENDENT NEWS

MARKET CLOSE: NZ shares drop below 10,000

Published: Tue 4 Jun 2019 09:02 PM
MARKET CLOSE: NZ shares drop below 10,000; A2 slumps on China fears
By Paul McBeth
June 4 (BusinessDesk) - The S/NZX 50 Index closed below 10,000 for the first time in almost a month, as A2 Milk slumped almost 11 percent on fears that China's plans to develop its domestic infant formula market may weigh on the milk marketing firm.
The NZX50 dropped 166.06 points, or 1.6 percent, to 9,951.93. Within the index, 30 stocks fell, 16 rose, and four were unchanged. Turnover was $143.3 million, of which A2 accounted for $38.5 million.
The local market was already poised for a weak session after Australia's S/ASX 200 Index opened the winter quarter on the back foot, falling 1.3 percent yesterday. The Australian market clawed back some of that loss, and was up 0.3 percent in afternoon trading, with bank stocks getting a boost from the Reserve Bank of Australia meeting expectations when it cut the target cash rate a quarter-point to 1.25 percent.
That wasn't enough to smooth the domestic decline, with A2 weighing on the broader market, given its heavy weighting on the index. A2 dropped $1.71 to $14.09 on a volume of 2.7 million, more than three times its 90-day average of 780,000 shares. Synlait Milk, which supplies A2, fell 2.5 percent to $8.65.
"That's on the back of the Chinese government on Monday releasing an action plan on the improved quality of its domestically-made baby formula and increasing its market share to above 50 percent," said Peter McIntyre, an investment adviser at Craigs Investment Partners. "That's really had an impact on A2."
Fonterra Shareholders' Fund unit increased 0.3 percent to $4, Fonterra Cooperative Group's farmer-owned shares were down 0.3 percent at $3.99 ahead of tonight's Global Dairy Trade auction.
Companies with international exposure were also under pressure, with Gentrack Group down 3.8 percent at $5.08, Tourism Holdings falling 3.4 percent to $3.73, and Fisher & Paykel Healthcare dropping 2.5 percent to $15.01. Mainfreight fell 2.3 percent to $37.50, Pushpay Holdings was down 2.1 percent at $3.71 and Vista Group International declined 2.1 percent to $5.65.
McIntyre said the heightening rhetoric between the US and China in their trade dispute was adding uncertainty to investors, especially with Mexico drawn back into the US administration's tariff orbit.
Spark New Zealand was the most active stock on a volume of 3.3 million shares, less than its 5.5 million average. It fell 2 percent to $3.74.
Meridian Energy rose 0.5 percent to $4.26 on a volume of 2 million shares, Contact Energy was up 0.1 percent at $7.38 on 1.5 million shares, and Auckland International Airport increased 1 percent to $8.85 on a volume of 1.3 million.
Fletcher Building rose 1.3 percent to $5.32, reversing an earlier decline, after it said it completed the sale of its Formica unit earlier than expected and lowered its annual earnings guidance. It traded on a volume of 1.2 million, in line with its normal trading.
Kiwi Property Group fell 1 percent, or 1.5 cents, to $1.56 after giving up rights to a 3.475 cent dividend. Its volume was 1.5 million shares.
Summerset Group rose 1.1 percent to $5.60 after the company said it plans to develop two new retirement villages after buying land in Whangarei and Cambridge.
Infratil rose 1.9 percent to $4.35, posting the biggest increase on the day.
Bank of New Zealand's 2020 bonds paying annual interest of 4.43 percent were the most active debt security, with 900,000 notes changing hands. The bonds closed at a yield of 1.77 percent, down 6 basis points.
(BusinessDesk)
BusinessDesk
Independent, Trustworthy New Zealand Business News
The Wellington-based BusinessDesk team provides a daily news feed for a serious business audience.
Contact BusinessDesk
Email:

Next in Business, Science, and Tech

No New Coal Boilers for Fonterra
By: Fonterra
Soil turned on controversial Waimea Dam
By: RNZ
Drones will help economy take off
By: New Zealand Government
Fuel and rent drive inflation
By: Statistics New Zealand
Fonterra to go coal-free 11 years ahead of schedule
By: BusinessDesk
Government welcomes Fonterra’s speedy moves away from coal
By: New Zealand Government
Coal group welcomes Fonterra's coal exit
By: Coal Action Network
Coal Action protest finishes
By: Coal Action Network
Fonterra decision stimulus for increased biomass fuel supply
By: Bioenergy Association
Fonterra’s announcement a win for the climate movement
By: 350 Aotearoa
Methane target could be catastrophic - Shareholders' Council
By: BusinessDesk
Drone integration a flight closer
By: Airways New Zealand
New recommendations on flying drones over marine animals
By: AUT University
Pizza-by-drone a reality with world-first NZ delivery
By: Domino's Pizza
View as: DESKTOP | MOBILEWe're in BETA! Send Feedback © Scoop Media