Hallenstein Glasson was on the rise after a strong trading update.
New Zealand’s S&P/NZX 50 index fell for a second day as investors continued to digest the mortgage rate hike by Westpac New Zealand, signalling an end to the extra oomph injected into the economy by the Reserve Bank.
New RBNZ governor Anna Breman told media there’s no preset course for monetary policy, with data key for the committee’s decisions.
Index heavyweights such as Infratil and Meridian Energy weighed on the local bourse, while rate sensitive stocks such as Fletcher Building and Ryman Healthcare were among those at the bottom of the leaderboard.
Meanwhile, Hallenstein Glasson Holdings rallied after providing a strong trading update at its annual meeting, where two of its independent directors received sizeable ‘no’ votes to their re-elections to the board, while Vulcan Steel snapped a two-day decline to post the biggest gain on the day.
The NZX50 fell 83.72 points, or 0.6%, to 13,371.06, with 29 stocks declining, 18 gaining and three unchanged. Turnover was $137.5 million across the main board, with Fisher & Paykel Healthcare accounting for $21.1 million as it slipped 0.5% to $37.89.
Stock markets across Asia were broadly weaker, with Australia’s S&P/ASX 200 index down 0.1% in late trading, while Japan’s Nikkei 225 slipped 0.3% and Hong Kong’s Hang Seng slid 0.4%.
Investors are awaiting the Federal Reserve’s policy review on Wednesday in the US, which is expected to deliver a quarter-point cut to the federal funds rate, taking the range to 3.5%-to-3.75%.
That comes as the easing cycles in New Zealand and Australia appear to have come to an end, while next week’s review by the Bank of Japan is expected to hike its benchmark rate to 0.75%, the highest it’s been since 1995.
The Reserve Bank’s new governor Anna Breman told a media briefing today that there’s no preset course for monetary policy with data key for the decision-making committee. In saying that, she also noted that the inflation outlook is favourable and heading back to the midpoint of the central bank’s target range.
The kiwi dollar slipped to 57.68 US cents at 5pm in Auckland from 57.86 cents yesterday.
The hike in longer mortgage rates by Westpac New Zealand continued to weigh on the broader market as expectations firm up that the Reserve Bank is done cutting the official cash rate. Next week’s September quarter gross domestic product figures will be an important indicator as to whether the economic recovery is setting in.
“Westpac’s increase in mortgage rates yesterday really got people’s attention,” said Mark Lister, investment director at Craigs Investment Partners “It’s been a while since we’ve seen mortgage rates go up, and people expected them to maybe go down a bit further.”
Index heavyweights were the major drag on the index, with Infratil down 2.1% at $11.46 and Meridian Energy sliding 1.8% to $5.50.
Fletcher Building, which is often linked to the economic cycle, led the market lower, falling 3.2% to $3.58, while retirement village operators typically tied to the housing market were also softer: Ryman Healthcare declined 2.1% to $2.81 and Summerset Group Holdings slipped 1% to $11.82.
Rate sensitive commercial landlords were broadly weaker, with Argosy Property falling 1.6% to $1.22, Precinct Properties NZ down 1.3% at $1.18, Investore Property decreased 0.9% to $1.17 and Stride Property Group slipped 0.7% to $1.39.
Kiwi Property Group dipped 0.5% to $1.05 on a volume of 3.9 million shares, the most for the day.
Meanwhile, Gentrack fell 1.9% to $9.40 on an unusually large volume of almost 2.1 million shares. Of that, almost 2 million shares changed hands in a single trade at $9 a share.
Vulcan Steel posted the biggest gain on the day, up 5.7% at $8.30 on relatively light trading as it snapped a two-day decline.
Meanwhile, Hallenstein Glasson Holdings climbed 3% to $9.56, after the retailer said sales were up 14% in the first 18 weeks of the financial year, primarily from Australia. The company warned not to read that growth as indicative of the key Christmas trading period. Independent directors Malcolm Ford and Joanne Appleyard were re-elected to the board at the annual meeting, with chunky votes against of almost 19% and 18% respectively.
Economic bellwether Freightways rose 1.4% to $14.20 after the ANZ truckometer gauge showed light and heavy traffic eased in November, albeit both remaining up on an annual basis. Global logistics group Mainfreight declined 0.7% to $66.75.
Travel and tourism companies were mixed after Statistics New Zealand figures showed growth in international visitors slowed in October, as they creep towards pre-covid levels. Auckland International Airport declined 0.9% to $8.02, while Air New Zealand rose 0.9% to 59 cents and Tourism Holdings advanced 1,5% to $2.68.
Outside the benchmark index, Trade Window Holdings was unchanged at 32.5 cents after shareholders approved a A$5 million placement to help fund the acceleration of its next generation freight forwarding solution, firm up its balance sheet and help facilitate a secondary listing on the ASX.
Being AI dipped 2%, or 0.1 of a cent, to 4.9 cents after shareholders approved the sale of the Send Global business.
Reporting by Paul McBeth.
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