Market Announcements
Market Summary
Announcements This Morning:
The US central bank has cut interest rates - The Federal Reserve said it was lowering the target for its key lending rate by 0.25 percentage points. That will put it in a range of 4% to 4.25% - the lowest level since late 2022.
GDP - New Zealand’s gross domestic product (GDP) fell by 0.9% in the June quarter, a reduction well over market expectations, Stats NZ data shows. Expectations were for a 0.4% decline in GDP while Reserve Bank forecasts were for a 0.3% drop. The quarterly decline was driven by manufacturing, down 3.5% and construction, down 1.8%.
Wednesday's Sharemarket Report
The New Zealand sharemarket closed flat on a quiet day on Wednesday, with attention focused overseas as investors await the United States Federal Reserve decision on interest rates. The S&P/NZX 50 Index closed down 0.05% or 6.5 points, falling to 13,228.38 after 34.8 million shares worth $141m were traded. The S&P/NZX 20 index closed at 7,632.79 points, down 0.24%, while the S&P/NZX 10 index ended the day at 12,722.28, falling 0.30%. There were 68 gainers on the main board and 70 decliners.
Hamilton Hindin Greene investment adviser Jeremy Sullivan said markets were in a holding pattern before the result of the Fed’s meeting, set to be released at 6am NZ time on Thursday. “It’s going to be a key catalyst for markets globally, and it’s not long for us to wait now until we see what everybody knows, which is a rate cut,” Sullivan said. “The dot plot is going to be key, whether it’s four more cuts or three or five, and if there’s dissent within the ranks amongst the board. “Markets could move materially if there’s any divergence from the current expectations.” Sullivan explained that outside of California and AI-related industries, the US economy is “pretty weak”. He said the Fed would have cut interest rates earlier, but President Donald Trump’s tariff regime forced it to delay any changes to account for any inflationary shocks.
On the NZX, Sullivan pointed to Seeka, which announced an upgrade to its earnings guidance to between $39m and $43m at a profit before tax level. The company previously forecast profit before tax guidance of between $35m and $39m. Seeka’s share price lifted 3.84% or 16c to $4.33 after 43,275 shares changed hands on turnover worth $187,698.19. Dairy companies had mixed results after prices dropped slightly in the latest Global Dairy Trade auction with a 0.8% dip across the board. This marked the third consecutive decline, following a 4.3% decrease at the previous auction and a 0.3% slide before that.
A2 Milk's share price fell 3.2% or 33c to $9.97 after 551,973 shares changed hands on turnover worth $5.5m. Meanwhile, Synlait Milk’s share price rose 1.49% or 1c to $0.68.
The market's largest inhabitant, Fisher & Paykel Healthcare, had a slight decline, dropping 0.21% or 8c to $37.45 on turnover worth $14.2m.
Wall Street stocks edged down from record highs on Tuesday following solid US retail sales data as markets held their breath ahead of the Federal Reserve rate decision.
Source: Business Desk
Australian Market Report
Ahead of the local open SPI futures were 3 points higher at 8832.
- close [Morningstar with AAP]: Australia's share market has more than wiped the previous session's gains, as financials, miners and real estate stocks weighed on the bourse ahead of a key central bank decision.
The S&P/ASX200 fell 59.2 points, or 0.67 per cent, to 8,818.5, as the broader All Ordinaries slipped 56.3 points, or 0.62 per cent, to 9,094.9.
The top-200 is down roughly 0.6 per cent for the week and has tumbled more than two per cent from its record 9,054.5 close on August 22.
The rout came ahead of a keenly awaited US Federal Open Market Committee meeting, where analysts expect a 25 basis point cut to the US funding rate, Pepperstone head of research Chris Weston said.
"We saw the bulk of the selling from the open going through to roughly lunchtime, and then from there it was really just a flatline into the close," he told AAP.
"Everyone's sitting on their hands, everyone's positioned optimally for the for the Fed meeting decision and whether there's any change in sentiment that could impact equities."
Only three of 11 sectors closed higher, as financials (-0.7 per cent), materials (-0.9 per cent), real estate (-1.6 per cent) and consumer discretionary stocks (-1.1 per cent) dragged.
ANZ was the only big four bank to eke out a gain, up 0.3 per cent as CBA slipped 0.1 per cent to $168.15 and NAB (-1.5 per cent) and ANZ (-1.0 per cent) sold off.
Investment giant Macquarie Group also sunk 1.1 per cent and the insurance sector was broadly red, led by IAG (-2.0 per cent) and Suncorp (-1.5 per cent).
Large cap miners weighed on the raw materials sector, with BHP, Fortescue and Rio Tinto all down one per cent or more, as BHP announced plans to axe 750 Queensland coal jobs due to weak prices and an "unsustainable" royalty regime.
ASX-listed gold miners also bled lower, as investors took profits after spot gold hit a new all-time high above $US3,700 ($A5,540) an ounce overnight.
Energy stocks and utilities outperformed the broader market, up 0.5 per cent and 0.8 per cent, as concerns over disrupted Russian crude supply supported oil prices.
IT stocks were the only other sector to lift, grinding 0.1 per cent higher with help from REA Group, WiseTech and Xero.
Real estate was the worst-performing sector, slumping 1.6 per cent as GPT Group and Stockland each tumbled more than 2.2 per cent, and despite GPT appointing Citigroup executive Tony Osmond to its board as an independent non-executive director.
The Australian dollar is buying 66.74 US cents, up slightly from 66.65 US cents on Tuesday at 5pm, with the US dollar strength index at multi-year lows.
"It's not just a weak US dollar play, you see the Aussie working well against the Kiwi, the Pound, Euro, Yen, you name it," Pepperstone's Mr Weston said.
Australia's decent relative economic growth, stable government (compared to examples like France, the US and Japan), along with strength in China's equity market, iron ore prices and the Yuan were supporting the local currency's push.
ON THE ASX:
The S&P/ASX200 fell 59.2 points on Wednesday, or 0.67 per cent, to 8,818.5
The broader All Ordinaries lost 56.3 points, or 0.62 per cent, to 9,094.9
The NZX 50 Lost -37.34 points (-0.28%) to 13191.04
Companies commencing Ex-Dividend Trading Today (ASX 300):
Cochlear Limited
Macmahon Holdings Limited
NRW Holdings Limited
PWR Holdings Limited
South32 Limited
The a2 Milk Company Limited
Overseas Market Report
[Morningstar with Dow Jones]:
U.S. stocks ended mixed. The DJIA lifted 0.6% to 46,018.32, the S&P 500 declined 0.1% to 6,600.35 and the Nasdaq fell 0.3% to 22,261.33.
Among S&P 500 companies, the top three gainers were Hologic Inc HOLX surging 7.69%, Workday Inc WDAY jumped 7.27%, and Fox Corp FOXA lifted 3.05%.
The biggest decliners were Builders FirstSource Inc BLDR which dropped 5.63%, Uber Technologies Inc UBER fell 4.98%, and Mohawk Industries Inc MHK lost 3.99%.
Asia
Chinese shares closed higher. The benchmark Shanghai Composite Index rose 0.4% to 3,876.34 and the Shenzhen Composite Index gained 0.8% to 2,510.52.
Hong Kong shares ended higher. The benchmark Hang Seng Index climbed 1.8% to 26,908.39.
Japanese shares ended lower. The Nikkei Stock Average slipped 0.2% to 44,790.38.
India shares ended higher. The BSE SENSEX climbed 0.4% to 82,693.71.
Europe
Stocks in the U.K. finished higher. The FTSE 100 Index lifted 0.1% to 9,208.37. In Europe, shares closed mixed. The Germany's DAX climbed 0.1% to 23,359.18, and the France's CAC 40 fell 0.4% to 7,786.98
