Sharechat Logo

MARKET CLOSE: NZ market dives on escalating US-China trade war

Wednesday 7th August 2019

Text too small?

(Aug. 6, 5:53 PM) The New Zealand share market took a hit in a day of red on signs China may use its currency to stand up to the US in the two countries’ escalating trade war. 

The S&P/NZX 50 Index fell 178.86 points, or 1.7 percent, to 10,587.17. Within the index, 47 stocks fell, one rose and two were unchanged. Turnover was solid at $133.2 million.

Cinema software provider Vista Group led the declines, down 5.4 percent at $5.65. The 258,500 shares traded were down on its 334,000 average the past three months.

Index heavy-weight A2 Milk fell 2.9 percent to $16.56. About 1.05 million shares changed hands, up from its 710,000 average. Supplier Synlait Milk, another firm tied closely to China, fell 3.9 percent to $9.32. Units in the Fonterra Shareholders’ Fund were unchanged at $3.75.

“Obviously tension between China and the US is continuing with currency wars developing, and the yuan down to levels not seen since 2008,” said Peter McIntyre, an investment advisor at Craigs Investment Partners. 

Asian markets were weaker across the board, with the Hang Seng down 1 percent, the Straits Times Index down 0.7 percent and the S&P/ASX200 down 2.2 percent in early afternoon trading.

“I don't see an immediate end to it,” McIntyre said. “This tension is going to continue and I think that August is a difficult month and it will carry on at least in the short to medium term. Tomorrow the focus will be on the New Zealand market and the Reserve Bank cut.”

A report today showing the country’s unemployment rate unexpectedly fell to an 11-year low of 3.9 percent in the June quarter won’t be enough to put off a rate cut by the Reserve Bank tomorrow, economists said.  The deteriorating global situation and rate cuts by other central banks have most investors expecting a 25 basis-point cut tomorrow.

Fishing company Sanford was the only gainer in the benchmark index today, rising 0.5 percent to $6.74.

Spark New Zealand was the heaviest traded stock, with just over 4.6 million shares changing hands, 50 percent more than usual. The stock fell 1.4 percent to $3.98.

Among other stocks trading on volumes of more than a million shares, Argosy Property fell 1.4 percent to $1.395, Oceania Healthcare fell 1 percent to $1.02, Precinct Properties NZ fell 1.7 percent to $1.755 and Goodman Property fell 1.4 percent to $2.06.

“Infrastructure related sectors will be able to weather this a little bit better and those property-related New Zealand-centric companies are likely to escape this,” McIntyre said.

Power generators Meridian Energy and Mercury NZ both closed at $4.68, down 1.3 percent  and 1.9 percent respectively. Air New Zealand fell 2.2 percent to $2.67.

McIntyre said Fisher & Paykel Healthcare would be one to watch for impacts of the US-China trade war. Shares in the company were down 0.9 percent at $15.80. Volume of 1.1 million was almost twice its average the past three months.


NOTE: please be advised to read full articles from Business Desk Website, you will have to pay a subscription fee on their website.

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Supplements, skincare firm poised for reverse listing
NZX, EEX eye carbon auction opportunity
A2 Milk boss steps down, shares fall 7.7%
NZX says operating earnings will reach top of guidance
NZ dollar consolidates weekly gain of more than a US cent
NZ dollar holds gains on improved dairy, bank capital outlook
MARKET CLOSE: NZ shares gain; banks rally on Reserve Bank capital decision
NZ dollar rises; bank capital rules less harsh than expected
RBNZ relaxes capital requirements, allows preference shares, extends phase-in
NZ dollar extends gain amid mixed US data, possible trade progress

IRG See IRG research reports