Mercury Energy Impresses As NZX 50 Dips 0.3%

Sharp gains in dairy stocks were not enough to keep the New Zealand sharemarket's benchmark index above the ledger on Tuesday.  The S&P/NZX 50 declined 0.32% to 12,928.68 points, with 55.9 million shares worth $154.4m changing hands.

Mercury shares rose 1.64% to $6.495 despite the company reporting a net profit after tax (npat) of $1m, compared with $290m the previous year.  The market was focused on operating earnings (ebitdaf) and that the figure came out at $786m when the consensus estimate was $773m.

The a2 Milk Company had another good day, lifting 4.13% to $9.32 on volumes worth more than $24.5m. On Monday, alongside its annual result, a2 Milk told investors it had inked a long-awaited deal to purchase Yashili’s NZ plant for $282m. It also sold its stake in Mataura Valley Milk to Open Country Dairy.

Synlait Milk jumped 7.02% to 61 cents after it confirmed media reports that it was in discussions with “a party” over its North Island assets.  A report in The Australian overnight said Abbott Laboratories was believed to be in talks with the dual-listed milk producer to buy its Pōkeno factory south of Auckland. United States-based Abbott is a customer of Synlait’s at the site.

Though Synlait has dipped since trading above $1 in April, both it and a2 Milk are up over 40% in the year to date, while the NZX 50 has traded flat over the same period. The other main openly traded dairy security on the NZX, Fonterra Shareholders’ Fund, lost 0.43% to $6.95.

Elsewhere on the exchange, SkyCity Entertainment Group went into a trading halt.  The casino operator said it expects to make a “material announcement” regarding a capital raise. It said, “no final decision” had been made around the raise, but a trading halt was needed to “maintain an orderly market while SkyCity works to finalise the capital raise”.

Infratil, which held its annual meeting in Auckland on Tuesday, slipped a modest 0.12% to $12.19.

Today the market will be awaiting the Reserve Bank of NZ's (RBNZ) monetary policy statement (MPS) announcement.  Another 25-point basis cut is forecast, but the market will be looking for tone and whether or not the RBNZ revises its terminal rate, which is currently set a 2.85%.

Both Fletcher Building and Spark NZ will report today.

Source: Business Desk

Ahead of the local open SPI futures were 10 points lower at 8885.

- close [Morningstar with AAP]: The Australian share market has recorded its biggest slip at the end of trading since the start of August, hampered by a steep fall in health stocks.

The S&P/ASX200 was down 63.1 points, or 0.7 per cent, to 8,896.2, as the broader All Ordinaries fell 59.7 points, or 0.65 per cent, to 9,173.8.

Tuesday's close marked the steepest drop since August 1, when stocks fell by 0.92 per cent, and after four record-breaking closes last week into this week.

Local boards were initially led by muted results in overseas markets at the start of trade, Ord Minnett senior private wealth adviser David Lane said.

"Today, the volatility was on individual stocks - reactions to company reports as they've come through," he told AAP.

It was a mixed trading session with four of 11 local sectors closing out the day in the red, led by healthcare, while telecommunications was the highest-performing sector.

Healthcare stocks led the stumble, dropping 8.37 per cent after biotech giant CSL's share price plummeted 16.04 per cent to $227.79 per share on the announcement up to 3000 jobs will be cut and its vaccine arm spun off in a bid to shave $500 million off its bottom line.

Mr Lane said despite the company's reasonably good period over the past few months, the headline grabber was its announcement.

"It pretty much finished on its lows and the result itself actually looked quite good,'' he said.

"It was ahead of expectations ... and it looked like the result itself was ahead of consensus forecasts."

Mining giant BHP recorded a 1.57 per cent share increase after posting a $US9 billion ($A13.9 billion) full-year net profit even though that was weighed down by weak commodity prices.

But that didn't stop it from buoying the materials sector, which recorded a 0.34 per cent lift at the close.

Energy was the second biggest loser, falling 2.2 per cent, with Woodside, Santos and Whitehaven Coal posting declines.

Woodside boss Meg O'Neill expressed frustration over the federal government's tardiness to sign off on its North West Shelf project.

She suggested lengthy approval processes led to a drag on productivity as the company posted a profit drop for the first half of the year, down to weaker commodity prices and other factors despite a major boost in production.

Telecommunications services led the gains, posting a 0.72 per cent increase on the back of job-finding service Seek which recorded a 7.99 per cent share price increase following an increase in revenue.

IT stocks rose by 0.57 per cent at the close buoyed by software firm Xero and Life360.

The heavyweight financial sector finished trading in the green with all four big banks recording increases, led by NAB.

The Australian dollar ended the day buying 64.91 US cents, down from 65.13 US cents on Monday's close.

ON THE ASX:

The S&P/ASX200 fell 63.1 points on Tuesday, or 0.7 per cent, to 8,896.2

The broader All Ordinaries lost 59.7 points, or 0.65 per cent, to 9,173.8

The NZX 50 added 3.97 points (0.03%) to 12932.65

Companies commencing Ex-Dividend Trading Today (ASX 300):

Commonwealth Bank of Australia

[Morningstar with Dow Jones]:

U.S. stocks ended mixed. The DJIA was unchanged at 44,922.27, the S&P 500 declined 0.6% to 6,411.37 and the Nasdaq fell 1.5% to 21,314.95.

Among S&P 500 companies, the top three gainers were Intel Corp INTC surging 6.97%, Prologis Inc PLD jumped 5.05%, and Wynn Resorts Ltd WYNN lifted 4.33%.

The biggest decliners were Palantir Technologies Inc PLTR which dropped 9.35%, Coinbase Global Inc COIN fell 5.82%, and Oracle Corp ORCL lost 5.80%.

Asia

Chinese shares closed mixed. The benchmark Shanghai Composite Index was unchanged at 3,727.29 and the Shenzhen Composite Index climbed 0.1% to 2,343.74.

Hong Kong shares ended lower. The benchmark Hang Seng Index declined 0.2% to 25,122.90.

Japanese shares ended lower. The Nikkei Stock Average fell 0.4% to 43,546.29.

India shares ended higher. The BSE SENSEX rose 0.5% to 81,644.39.

Europe

Stocks in the U.K. finished higher. The FTSE 100 Index gained 0.3% to 9,189.22. In Europe, shares closed higher. The Germany's DAX climbed 0.4% to 24,423.07, and the France's CAC 40 added 1.2% to 7,979.08