Tuesday 9th May 2017
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New Zealand stocks fell, weighed by ongoing worries about Comvita, weaker sentiment across the Tasman as banking stocks took a tumble, as well as some profit taking in blue-chips like Fletcher Building and Ebos Group.
The S&P/NZX 50 index fell 14 points, or 0.2 percent, to 7,412.12 Within the index, 23 stocks fell, seven were unchanged and 20 rose. Turnover was $134 million. Australia's S&P/ASX 200 index was down 0.6 percent in late trading.
Comvita led the market lower, falling 3.6 percent to $6.10, extending its decline after the discovery of the myrtle rust fungal plant in the Far North.
"It's not hard to see why Comvita is down as markets don't like uncertainty," said Hamilton Hindin Greene broker James Smalley. While commentary out of Australia would indicate that fungal plant has had little impact, investors are jittery about what will happen in New Zealand where conditions may be different, said Smalley. "Investors will be watching the headlines for the impact over the next few weeks and months to see if it will have an impact," he said.
Dual-listed banking stocks fell as banking shares were weaker across the Tasman after the four big banks said they working hard to cut costs to maintain earnings momentum as they face challenges such as new government inquiry and a possible new levy. Westpac Banking Corp shed 3 percent to $35.27 while Australia & New Zealand Banking Group fell 2.5 percent to $31.20. Locally owned lender Heartland Bank fared better, adding 2.9 percent to $1.75.
Smalley noted that there was some profit taking in stocks including Fletcher Building given its recent gains. The stock may also have been impacted on reports that the Commerce Commission was investigating a complaint that Fletcher Building sold substandard steel. According to Radio New Zealand, the complaint, which was made by an unidentified industry player, relates to steel imported in the year to March 2016. Fletcher said its subsidiary, Easysteel, was cooperating with the inquiry. Fletcher Building ended down 1.9 percent at $8.48.
Sanford shed 2.1 percent to $7.10 but Smalley said the volumes were thin and it may have just been someone looking to sell down their holding.
In the other direction, New Zealand Refining posted the biggest but again, on very light volumes. The stock added 3.4 percent to $2.43. "It might just be the opposite story to Sanford, where it has been bid up to that level so the buyer can actually get some volume," said Smalley.
A2 Milk continued to attract attention, adding 2.6 percent to $3.60 while Port of Tauranga ended up 1.7 percent at $4.24.
Meanwhile, other large caps gave back some recent gains with Auckland International Airport down 1.3 percent to $6.97, Ebos shed 1.4 percent to $18.15. Tegel Group remained out of favour, down 0.9 percent at $1.08 and Sky Network Television fell 0.8 percent to $3.69.
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