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MARKET CLOSE: NZ stocks edge higher, led by Contact; Asian markets slide

Monday 5th August 2019

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(Aug. 2, 5:58 PM)New Zealand shares edged higher despite a slide in Asian markets on renewed concerns for the global trade outlook. Contact Energy led the gainers as local investors prepare for coming earnings.

The S&P/NZX 50 Index rose 3.05 points, or 0.03 percent, to 10,863.87. Within the index, 16 stocks rose, 25 fell and nine were unchanged. Turnover was modest at $92 million with only a handful of stocks trading on more than a million shares.

Asian markets were generally weaker after China-US trade talks ended inconclusively and President Donald Trump tweeted that a 10 percent tariff would be imposed on another US$300 billion of Chinese goods from Sept. 1.

Australia’s S&P/ASX 200 index was down 0.3 percent in early afternoon trading. The Hang Seng index was down 2.3 percent and the Straits Times index was down 0.8 percent.

“It’s a sea of red out there,” said Peter McIntyre, an investment adviser at Craigs Investment Partners. "We are probably faring quite well compared with the rest of Asia today on cautious trading."

Contact led the index higher, rising 1.8 percent to $7.92. Fewer than 438,000 shares changed hands, about half its average daily volume the past three months.

Electricity and property stocks have gained strongly in recent months as declining interest rates boosted demand for defensive sectors with strong dividends.

Tourism Holdings gained 1.7 percent at $4.09, with 66,000 shares traded – about a third of the daily average. Skellerup Holdings also gained 1.7 percent at $2.38. The 39,500 shares traded were only about a quarter of the usual volume.

Spark New Zealand was the most heavily traded stock of the day, rising 1.5 percent to $4.03. About 3.3 million shares were traded, just ahead of its three-month daily average.

Investors continue to digest news that Vodafone New Zealand, now owned by Infratil and Brookfield Asset Management, will be ahead of the pack as it plans to switch on a 5G network in major cities in December.

More than a million Infratil shares changed hands today, the stock down 0.1 percent at $4.67.

McIntyre said full-year reports from firms due in coming weeks will be keenly awaited, given the mixed picture in the economy.

“We have seen some parts of the economy, and business confidence, soften with the expectation of an interest rate cut."

The latest ANZ-Roy Morgan survey of consumer confidence today fell 6 points in July to 116.4, the lowest reading so far this year. While a net 39 percent of those surveyed think it's a good time to buy a major household item, a net 1 percent expect the economy to be in worse shape in a year's time. A net 12 percent had been expecting conditions to improve in the previous survey.

Australia & New Zealand Banking Group led the decliners, down 2 percent at $28.81. Auckland International Airport fell 1.5 percent to $9.35, on about half its usual daily volume.

Air New Zealand rose 0.7 percent to $2.73, also on lighter than usual volumes. McIntyre said the share price was aided by a sharp drop in oil prices overnight.

Network operator Chorus fell 1.5 percent to $5.45. The 852,000 shares traded was close to twice its usual daily volume.

Among other stocks trading on more than a million shares, Argosy Property fell 0.4 percent to $1415, Kiwi Property Group fell 0.3 percent to $1.615, and Goodman Property was unchanged at $2.075.


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