MARKET CLOSE: NZ shares mixed as global investors spooked by Amazon, Google results

Friday 26th October 2018

New Zealand shares were mixed as weaker than expected earnings from global tech giants spooked investors already wary of over-valued equity markets.

The S&P/NZX 50 index edged up 0.17 of a point, or 0.002 percent, to 8,568.40, snapping a five-day decline. Within the index, 21 stocks gained, 20 fell and nine were unchanged. Turnover was $121.7 million.

The local bourse teetered between positive and negative territory after results from Amazon and Google missed expectations, casting a pall across Asian equity markets. Australia's S&P/ASX 200 index was down 0.5 percent in afternoon trading, while China's Shanghai Composite index fell 0.6 percent.

Matt Goodson, managing director at Salt Funds Management, said intraday volatility was very high through the session.

"There's not much bid tone at all and buyers are being very nervous," Goodson said.

Global financial markets have been contending with a return of heightened volatility in recent months as investors fret over the pace of global growth and weigh up the prospect of higher interest rates.

That's seen the NZX 50 fall from a record in September, although it's yet to cross the 10 percent threshold indicating a technical correction. The local bourse is the only major stock index in Asia-Pacific that's still in positive territory for the year-to-date, up 2 percent.

Goodson said a number of primarily larger companies had become very expensive during that run.

"Really we're seeing something of an unwind of the greatest excesses of it over the last three or four months," he said.

Spark New Zealand slipped 0.1 percent to $3.83 on 4.7 million shares traded, well ahead of its 2.7 million 90-day average. Kathmandu rose 0.4 percent to $2.63 on 14 times its average volume with 2.8 million shares traded.

Among other stocks with more than one million shares traded, Argosy Property was unchanged at $1.09, SkyCity Entertainment Group fell 1.9 percent to $3.70, Ryman Healthcare was unchanged at $11.77, Air New Zealand rose 1.5 percent to $2.655, A2 Milk Co fell 0.5 percent to $9.86, Z Energy gained 1.2 percent to $5.92 and Mercury NZ increased 1.4 percent to $3.375.

Pushpay led the market higher, up 5.2 percent to $3.66 from a two-month low. Fletcher Building increased 1.9 percent to $5.82, rising from a six-month low.

Heartland Bank gained 1.3 percent to $1.54. Trading in the stock is now halted until Nov. 1 when it restructures into Heartland Group, enabling its Australian reverse mortgage business to operate outside the umbrella, and prudential supervision, of the licensed bank.

Tourism Holdings fell 3 percent to $4.90 on slightly higher than average volume; Synlait Milk dropped 2.9 percent to $8.41 on lighter volumes than usual.

Outside the benchmark index, the tightly-held trucking firm TIL Logistics gained 1.3 percent to $1.60 after predicting earnings growth on an expanding economy and recent acquisitions. Mainfreight, whose transport and logistics operations span the globe, increased 0.3 percent to $28.07.

New Zealand Oil & Gas rose 5.2 percent to 61 cents after reporting gas indications at the Kohatukai-1 onshore exploration well south-east of New Plymouth. After the close of trading, NZOG said it reached a conditional agreement to farm into a permit off Western Australian held by its ASX-listed subsidiary Cue Energy.

New Zealand Refining fell 1.3 percent to $2.33 on modest volumes after appointing James Miller as an independent director.

Among firms facing takeover bids, Restaurant Brands New Zealand gained 0.1 percent to $8.51, SLI Systems increased 1.7 percent to 60 cents, and Tilt Renewables was unchanged at $2.28.

(BusinessDesk)

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