Market Announcements
Market Summary
The New Zealand sharemarket tumbled 1.2% yesterday as the US President Donald Trump threatened a blockade of the Hormuz Strait, and a2 Milk fell sharply on an earnings downgrade. The S&P/NZX 50 Index was in steady decline all day and closed at 13,020.18, down 161.26 points or 1.22%. There were 47 gainers and 89 decliners on the main board, with 33.5 million shares worth $114.1m changing hands. The NZX fared the worst of Asia-Pacific markets. The S&P/ASX 200 index was down 0.49% to 8,916.9 points at 6pm NZ time; the Japanese Nikkei 225 had decreased 0.76%; and the Hong Kong Hang Seng had declined 1.15%.
The NZ 10 Year Government Bond yield increased nearly 5 basis points to 4.768%. The oil price was back over US$100 (NZ$171.66) a barrel, with Brent Crude trading at US$102.2 at 6pm NZ time. At home, ANZ is predicting three 25-basis-point hikes in the Official Cash Rate (OCR) in July, September, and October, taking the rate to 3%. “We see the Reserve Bank becoming too uncomfortable with an OCR in stimulatory territory as inflation inevitably rises, concluding the risks of going too late outweigh the risks of hiking too soon – as long as the OCR is not considered contractionary,” ANZ said.
ASB Bank is forecasting the first OCR increase in September, brought forward from December, with an end-point of 3.25% by mid-2027.
Infant milk supplier a2 Milk slumped $1.39 or 12.4% to $9.82 after downgrading its full-year earnings guidance by more than 10% because of chain supply and production impacts. The company told the market it was currently experiencing temporary in-market product availability, primarily relating to shortfalls of China-label infant formula at distributors and retailers. Inventory levels have been low throughout the financial year, and there remains a significant backlog of unfilled purchase orders from Synlait with less capacity to catch up following the sale of its North Island plant. A2 Milk expects lower China label formula sales and additional one-off supply chain costs in the second half, and is now forecasting low-to-mid double-digit revenue growth, down from previous guidance of mid-double-digit percentage growth. Net profit is expected to be similar to last year’s of $202.9m, and operating earnings margin is likely to be 14-14.5%, down from 15.5-16%. Synalit, unchanged at 42c, said it continued to rebuild customer inventory following the previously-reported manufacturing challenges, and production has recently returned to targeted levels.
More than 9,000 Fonterra Co-operative farmer/shareholders will this week receive an average of $400,000 in cash from the $3.2 billion capital return following the sale of the Mainland Group to French dairy company Lactalis. Fonterra also announced the appointment of its well-regarded global ingredients president, Richard Allen, as the new chief executive, effective May 1, replacing Miles Hurrell. Hurrell will stay on as an adviser until September. Allen joined Fonterra as a graduate in 2008 and has been mainly involved with the global supply chain. Fonterra Co-operative was up 24c or 5.74% to $4.42, and the shareholders’ fund fell $2.25 or 26.79% to $6.15, representing the $2 a share capital return and special dividend of 16c a share.
Fisher & Paykel Healthcare was down 72c or 1.87% to $37.82; Mainfreight declined $1.36 or 2.27% to $58.64; Napier Port decreased 7c or 1.94% to $3.53; Scales Corp shed 14c or 2.34% to $5.84; and Tourism Holdings fell 19c or 8.33% to $2.09. Retirement village operator Summerset was down 18c or 2.02% to $8.75; Ryman Healthcare shed 5c or 2.4% to $2.03; and Oceania Healthcare declined 2.5c or 3.47% to 69.5c. Sky TV declined 11c or 3.47% to $3.06; Vulcan Steel shed 21c or 3.09% to $6.59; and Winton Land eased 5c or 2.75% to $1.80.
Source: Business Desk
Australian Market Report
Ahead of the local open SPI futures were 9 points lower at 8914.
- close [Morningstar with AAP]: The Australian share market has fallen after Middle East peace talks broke down at the weekend and the United States said it would begin its own blockade of the Strait of Hormuz.
The benchmark S&P/ASX200 index on Monday finished down 34.6 points, or 0.39 per cent, to 8,926.0 while the broader All Ordinaries dropped 42.3 points, or 0.46 per cent, to 9,113.5.??
Brent crude jumped back over $US100 a barrel for the first time in almost a week, climbing seven per cent to $US102, after US President Donald Trump announced the US Navy would begin imposing the blockade on the crucial waterway from midnight Monday AEST.
An adviser to Iran's supreme leader warned the country had "large, untouched levers" to counter any naval blockade, while the Speaker of Iran's parliament and its top negotiator warned Americans they would soon be nostalgic for $4 to $5 gas.
Capital.com analyst Kyle Rodda said the stage was now set for a hot war where things potentially escalated out of control, including possible strikes on Gulf energy assets and civilian infrastructure.
Etoro market analyst Josh Gilbert said the window for a clean resolution was narrowing, and investors needed to be positioned for the possibility that things could worsen before they got better.
Eight of the ASX's 11 sectors finished down, with telecommunications and utilities modestly higher and energy growing 2.1 per cent on the spike in oil prices.
Woodside and Ampol both climbed 2.6 per cent, while Santos grew 1.7 per cent and New Hope added 4.6 per cent.
The ASX's tech sector was the worst performing, dropping 1.8 per cent, in part due to a big fall by Life360.??
Shares in the family location-sharing platform dropped 8.1 per cent to an 18-month low of $17.91 after chief executive Lauren Antonoff on Friday announced job cuts and plans to restructure the company around an AI-led strategy.
In consumer staples, A2 Milk sank 13.0 per cent to an eight-month low of $8.04 after the Kiwi milk company trimmed its guidance, saying issues including the Middle East conflict were hampering its ability to supply infant milk formula to the Chinese market.
In the heavyweight mining sector, the iron ore giants all finished in the green.??
BHP rose 0.7 per cent to $54.35, Rio Tinto added 0.5 per cent to $172.07 and Fortescue edged 0.1 per cent higher at $20.28.??
Goldminers struggled, however, as the precious metal changed hands at $US4,742 an ounce, down $44 from Friday.
Northern Star dropped 2.0 per cent, Evolution slipped 2.4 per cent and Westgold Resources subtracted 2.9 per cent.
In the financial sector, the big four banks were mostly lower.??
NAB dropped 0.9 per cent to $44.95, Westpac retreated 0.4 per cent to $42.59 and CBA dipped 0.1 per cent to $183.20.
ANZ was the outlier, flat at $38.84.
Elsewhere in the sector, EML Payments plunged 35.7 per cent to a more than decade-low of 37 cents after the prepaid card company trimmed its full-year earnings guidance, citing in part weaker-than-expected trading in the northern hemisphere.
In health care, Telix Pharmaceuticals rose 7.7 per cent to a six-month high of $15.77 after the radiopharmaceutical company announced a partnership with a US company that will deliver an up-front payment of US$40 million ($56 million).
The Australian dollar was trading for 70.44 US cents, from 70.62 US cents at 5pm on Friday.
ON THE ASX:
The S&P/ASX200 dropped 34.6 points, or 0.39 per cent, to 8,926.0.
The broader All Ordinaries slipped 42.3 points, or 0.46 per cent, to 9,113.5.
The NZX 50 added 71.52 points (0.55%) to 13091.7
Overseas Market Report
[Morningstar with Dow Jones]:
U.S. stocks ended higher. The DJIA climbed 0.6% to 48,218.25, the S&P 500 rose 1% to 6,886.24 and the Nasdaq added 1.2% to 23,183.74.
Among S&P 500 companies, the top three gainers were Oracle Corp ORCL surging 12.71%, SanDisk Corp SNDK jumped 11.83%, and Fair Isaac Corp FICO lifted 8.52%.
The biggest decliners were Fastenal Co FAST which dropped 6.85%, Conagra Brands Inc CAG fell 4.41%, and Edison International EIX lost 4.40%.
Asia
Chinese shares closed higher. The benchmark Shanghai Composite Index rose 0.1% to 3,988.56 and the Shenzhen Composite Index gained 0.5% to 2,666.54.
Hong Kong shares ended lower. The benchmark Hang Seng Index dropped 0.9% to 25,660.85.
Japanese shares ended lower. The Nikkei Stock Average declined 0.7% to 56,502.77.
India shares ended lower. The BSE SENSEX fell 0.9% to 76,847.57.
Europe
Stocks in the U.K. finished lower. The FTSE 100 Index declined 0.2% to 10,582.96. In Europe, shares closed lower. The Germany's DAX fell 0.3% to 23,742.44, and the France's CAC 40 slipped 0.3% to 8,235.98
