Market Announcements
Market Summary
The New Zealand sharemarket, along with others offshore, slipped 0.7% on Thursday after the oil price went back over US$100 a barrel and ships were attacked in the Strait of Hormuz. After a strong morning, the S&P/NZX 50 Index dipped sharply in the afternoon – though it had a late rise - and closed at 13,199.29, down 93.84 points or 0.71%. The intraday high was 13,315.66 points. There were 87 decliners and 40 gainers on the main board with strong volumes of 64.62 million shares worth $187.54 million changing hands. In other markets, the S&P/ASX 200 Index was down 1.48% to 8,613.7 points at 6pm NZ time, the Japanese Nikkei 225 had fallen 1.74% to 54,066.07, and the Hong Kong Hang Seng had declined 1.23% to 25,579.95. On Wall Street, the S&P500 and Nasdaq Composite were flat, and the Dow Jones Industrial Average was down 0.61% to 47,417.27 points.
At 6pm NZ time, Brent Crude oil was trading at US$100.4 a barrel, up more than 9% on the day, despite the International Energy Agency deciding to release a record amount of oil reserves – 400 million barrels. The energy agency said the most important thing for a return to stable flows of oil and gas is the resumption of transit through the Strait of Hormuz.
ANZ Research expects the fourth quarter gross domestic product to have grown 0.2%, weaker than its forecast of 0.7% and the Reserve Bank’s 0.5%. The economy grew 1.1% in the third quarter, and ANZ said this would put average growth over the second half of last year at a reasonable 0.7% pace. ANZ said the main factor for the monetary policy outlook is how the conflict in the Middle East, and the resulting impacts on medium-term inflation and growth, play out from here.
There were few major price movements at home. Freightways declined 36c or 2.62% to $13.39; Ebos Group was down 47c or 2.07% to $22.25; Gentrack fell 25c or 3.13% to $7.75; and Scales Corp decreased 15c or 2.44% to $6. Infratil eased 11c to $10.82; Auckland International Airport shed 11c to $8.42; Fletcher Building was down 6c or 1.76% to $3.35; and SkyCity declined 1.5c or 1.91% to 77c.
Other decliners were Metro Performance Glass, falling 16c or 11.68% to $1.21; and 2 Cheap Cars decreasing 1.5c or 2.4% to 61c. The dual-listed stocks had another down day, with Westpac falling $1.11 or 2.23% to $48.69, and ANZ decreasing $1.10 or 2.4% to $44.80.
Contact Energy, down 1c to $9.30, announced its retail offer at $8.75 a share was oversubscribed, and it increased the capital raise to $125m after receiving double the number of shareholder applications. Contact earlier raised $450m through an institutional placement. Elsewhere in the energy sector, Meridian declined 21c or 3.78% to $5.34; Mercury was down 5c to $6.30; and Vector shed 8c to $4.71.
Winton Land increased 6c or 3.30% to $2.04 after obtaining fast-track consent to develop its Sunfield community of residential, retail and industrial near Papakura. Napier Port was up 8c or 2.25% to $3.64; Move Logistics increased 1.5c or 6.67% to 24c; Seeka gained 7c to $5.34; and Bremworth increased 2c or 2.9% to 71c. Port of Tauranga, down 1c to $7.94, said at its Investor Day it was uniquely positioned to become a long-term North Island hub for New Zealand. There was a robust containerised outlook with continued vessel upsizing and ships carrying more than 9,000 TEU containers on the horizon, the port company said.
Source: Business Desk
Australian Market Report
Ahead of the local open SPI futures were 28 points lower at 8592.
- close [Morningstar with AAP]: Australian shares have nosedived on reports Iran has attacked two oil tankers in Iraqi waters, snuffing de-escalation hopes and slingshotting crude prices skyward.
The S&P/ASX200 tumbled 114.5 points on Thursday, down 1.31 per cent, to 8,629, wiping all but 30 points of previous two sessions' gains.
The broader All Ordinaries lost 125.4 points, or 1.4 per cent to 8,851.4, wiping about $42.6 billion from its combined $3.05 trillion market value.
Crude prices surged more than six per cent during the session, an International Energy Agency plan to release millions of barrels of oil falling flat after Iran reportedly struck two oil tankers in the Straight of Hormuz.
"The IEA has just ordered the release of 400 million barrels of oil, its largest release on record, as the crisis in the Middle East reaches a tipping point," Stake senior market analyst Kylie Purcell said.
"Strategic reserve releases can help stabilise prices over the short-term, though futures will ultimately reflect whether supply through the Middle East returns to normal."
Only the energy sector ended the session higher, as banks and miners sold off.
Woodside shares jumped more than two per cent to $31.05, while Santos made gains and coal miners Yancoal and Whitehaven soared to beat out the top-200.
The moves came as Energy Minister Chris Bowen announced plans to cut fuel quality standards to allow higher sulphur levels for the next 60 days, hopefully circulating an extra 100 million litres of fuel per month.
BHP led the mining sector lower, the iron ore giant tumbling 1.9 per cent, while other industrial metals producers dipped as investors weighed the energy shock's impact on global growth outlooks.
Gold stocks also tumbled, as the precious metal eased to $US5,153 ($A7,230) an ounce, fading as investors sought safe haven in the US dollar.
Ora Banda bucked the trend to push higher after an encouraging drilling result, but handed back a significant chunk of the gains by the close.
Lynas Rare Earths was also exception as it rallied for a second day after locking in a price floor for a 12-year supply contract extension with a Japanese buyer.
The heavyweight financials sector dived 1.5 per cent as all big four banks traded lower, while insurance providers IAG and Suncorp edged higher in an otherwise sector-wide sell-down.
Interest rate-sensitive segments, particularly IT and real estate stocks, were hammered as a swathe of economists and analysts braced for a potential rate hike from the Reserve Bank next week.
While the RBA board ordinarily would look through the direct inflationary impacts of an oil shock, it would be mindful of higher inflation expectations becoming entrenched, Ebury market analyst Anthony Malouf said.
"Overall, this oil price shock arrives at an awkward time for the RBA, given it was already forecasting inflation to remain outside its target band until mid-2027," he said.
Ebury expects the RBA to keep rates on hold at next week's meeting, as it waits for key data to determine the road ahead for borrowing costs.
The Australian dollar is buying 71.22 US cents, down from 71.74 US cents on Wednesday at 5pm, as the greenback lifted on safe haven inflows.
ON THE ASX:
The S&P/ASX200 fell 114.5 points, or 1.31 per cent, to 8,629
The broader All Ordinaries lost 125.4 points, or 1.4 per cent, to 8,851.4
The NZX 50 Lost -62.92 points (-0.48%) to 13136.37
Companies commencing Ex-Dividend Trading Today (ASX 300):
CAR Group Limited
Fleetwood Limited
Guzman Y Gomez Limited
Wisetech Global Limited
Overseas Market Report
[Morningstar with Dow Jones]:
U.S. stocks ended lower. The DJIA fell 1.6% to 46,677.85, the S&P 500 slipped 1.5% to 6,672.62 and the Nasdaq declined 1.8% to 22,311.98.
Among S&P 500 companies, the top three gainers were CF Industries Holdings Inc CF surging 13.15%, LyondellBasell Industries NV LYB jumped 10.43%, and Dow Inc DOW lifted 9.43%.
The biggest decliners were Charles River Laboratories International Inc CRL which dropped 9.63%, Qnity Electronics Inc Q fell 7.95%, and The Estee Lauder Companies Inc EL lost 7.93%.
Asia
Chinese shares closed lower. The benchmark Shanghai Composite Index slipped 0.1% to 4,129.10 and the Shenzhen Composite Index slipped 0.7% to 2,725.35.
Hong Kong shares ended lower. The benchmark Hang Seng Index declined 0.7% to 25,716.76.
Japanese shares ended lower. The Nikkei Stock Average fell 1% to 54,452.96.
India shares ended lower. The BSE SENSEX dropped 1.1% to 76,034.42.
Europe
Stocks in the U.K. finished lower. The FTSE 100 Index slipped 0.5% to 10,305.15. In Europe, shares closed lower. The Germany's DAX fell 0.2% to 23,589.65, and the France's CAC 40 slipped 0.7% to 7,984.44
