Monday 5th February 2018
|Text too small?|
New Zealand shares took an early tumble, tracking a sharp fall on Wall Street on Friday after strong US jobs data fuelled concerns US inflation will accelerate faster.
The benchmark S&P/NZX50 Index fell 131.8 points, or 1.6 percent, to 8,283.48 as at 11.25am in Wellington, following Wall Street lower after the Dow Jones Industrial Average slid 2.5 percent, the Standard & Poor’s 500 Index dropped 2.1 percent, and the Nasdaq Composite Index retreated 2 percent.
A Labor Department report showed US employers added 200,000 jobs in January and average hourly earnings increased 2.9 percent from a year earlier, the biggest gain since June 2009. The gain in wages adds to concerns inflationary pressures will lead to higher interest rates, taking some of the shine out of equities.
Leading local decliners included a2 Milk, down 3.3 percent to $9.04, and Pushpay, down 4.2 percent to $3.93. Both have shown strong gains, however, with a2 Milk up around 300 percent over the past year and Pushpay up 150 percent.
The sharp US sell-off has triggered "a little bit of profit-taking, a little bit of defensiveness," said Forsyth Barr broker Suzanne Kinnaird, noting the hardest hit stocks have had very good recent gains.
"People are taking a bit of money off the table," she said.
Bryon Burke, head of equities at Craigs Investment Partners, also noted the biggest losers are the stocks with larger overseas registers and "they are also the ones that have been pushing the price higher, with money from overseas coming into these stocks."
Both Kinnaird and Burke noted that trading is very light ahead of Tuesday's public holiday in New Zealand as many market participants will have opted to take a four-day weekend. Turnover was $12.6 million. "There is negative sentiment but not aggressive selling by any means," said Burke.
Kinnaird said some investors will also be positioning themselves given US markets will have two sessions before New Zealand opens again on Wednesday.
Both said investors will be keeping a close eye on the Australian open for further direction.
No comments yet
Not much joy in Fellet’s Sky TV swansong
Ebos says underlying net profit boosted by animal care segment
KiwiRail operating earnings start to improve as Picton-Christchurch rail link reopens
Spark 1H profit dips 5.6% as Southern Cross withholds dividend
EMBARGOED: Power panel favours scrapping low-fixed charges, prompt-payment discounts
February 20th Morning Report
FIRST CUT: Fletcher betters first-half guidance with 8% ebit drop
Meridian posts record 1H operating earnings, raises dividend
FIRST CUT: A2 more than doubles 1H net profit
NZD lifts as US-China return to negotiating table, US seeking stable yuan