US President Trump’s sabre-rattling over Greenland kept markets tentative.
New Zealand’s S&P/NZX50 index posted its steepest daily decline in two months as a2 Milk Co led the benchmark lower, knocked by a sharp fall in China’s birth rate raising fears about the growth prospects for the infant formula firm.
Stock markets across Asia were broadly weaker as investors grappled with US President Donald Trump’s latest ratcheting up of tensions with Europe over the ownership of Greenland, fuelling demand for the relative safety of gold and buoying mining stocks such as Santana Minerals.
Ebos Group came in for some heavy selling, accounting for almost half the day’s turnover on the main board with some large orders going through at a small discount.
And prime minister Christopher Luxon talked up the coalition government’s track record in his state of the nation speech to kick off the political year, reiterating the administration’s plans to run a tight budget and pointing to indicators of a burgeoning economic recovery.
The NZX50 dropped 137.81 points, or 1%, to 13,580.29 in its biggest one-day fall since November 18. Within the index, 22 stocks fell, 23 gained and five were unchanged. Turnover across the main board was $184.3 million, of which Ebos Group accounted for $89.4 million as the healthcare products firm slipped 1.3% to $26.11.
The 3.4 million Ebos shares traded was the biggest volume on the day, and the most changing hands for the company since May 29 when the Zuellig family’s Sybos Holdings dropped below the 5% substantial shareholder threshold. Of that, 3.3 million shares were traded in three tranches at $26 apiece, or almost $85.9 million.
“Ebos has held up relatively well,” said Peter McIntyre, an investment adviser at Craigs Investment Partners. “From that size of volume, the share price has been remarkably stable.”
The a2 Milk Co led the benchmark index lower, sinking 11% to $9.80, its lowest close since September 29, after Chinese data showed a 17% fall in that nation’s annual births to 7.92 million. The infant formula firm counts China as a key market.
“A decline in China’s birth rate was expected, but I don’t think anyone was expecting such a large decline,” Craigs’ McIntyre said.
Among other stocks to decline on the day, Vulcan Steel fell 3.9% to $8.63, Gentrack declined 2.7% to $8.23 and Fletcher Building slipped 2.3% to $3.80.
Index heavyweight Fisher & Paykel Healthcare fell 1.4% to $38.63.
Meanwhile, stock market operator NZX poste the biggest gain on the day, up 3% at $1.57, while Heartland Group Holdings rose 2.5% to $1.235 and Freightways advanced 2.4% to $14.42.
New Zealand’s stock market joined a relatively lacklustre start to the week across Asia as investors fretted over US President Donald Trump’s latest tariff threat against a group of European nations as he seeks to acquire Greenland.
US markets are closed on Monday for the Martin Luther King Jr Day holiday, although S&P 500 futures indicate a 0.9% decline when Wall Street re-opens the following day. Meanwhile, Asian stock markets were broadly weaker, with Australia’s S&P/ASX 200 index down 0.5% in late trading, while Japan’s Nikkei 225 index fell 0.9% and Hong Kong’s Hang Seng dropped 1%.
The heightened uncertainty stoked demand for gold, with futures up 1.6% at US$4,667 an ounce at 5pm in Auckland, buoying mining stocks. Outside New Zealand’s benchmark index, Santana Minerals jumped 5.5% to $1.335, with its target price raised by RBC Capital Markets analysts.
New Zealand King Salmon Investments jumped 7.3% to 22 cents, its highest level since early October, after the fish farmer’s notice of annual meeting included a resolution to approve a $72 million, eight-year lease of a wellboat to support its plans for an open ocean farm.
Meanwhile, Prime Minister Christopher Luxon kicked off the political year, delivering a state of the nation address to a business audience in Auckland.
Luxon reiterated the coalition government’s plans to run tight budgets heading into the election and pointed to reforms for KiwiSaver, replacing NCEA in schools and overhauling resource consent law as three big changes underway that will also be part of the National party’s election campaign.
The kiwi dollar traded at 57.70 US cents at 5pm in Auckland from 57.57 cents last week, and climbed to 86.28 Australian cents from 85.88 cents.
Reporting by Paul McBeth.
Sign up to get the latest stories and insights delivered to your inbox – free, every day.
