Market Announcements
Market Summary
The New Zealand sharemarket turned downwards, finishing with a fall of more than 1.5%, as the Iranians dug their heels in and the oil price came surging back. After a strong rebound on Wall Street, the S&P/NZX 50 Index reached a morning high of 13,015.33 points, but it didn’t last long. The index began falling at midday and closed at 12,701.75, down 197.97 points or 1.53%. It has fallen nearly 4.7% over the past four trading days. There were 56 gainers and 78 decliners on the main board with turnover reaching 43.48 million shares worth $157 million. Brent Crude oil was trading at US$103.8 (NZ$178.14) a barrel at 6pm NZ time after falling as low as US$97.32.
President Donald Trump said the US and Iran have had “very good and productive” talks and ordered a five-day pause on strikes against Iranian power plants and energy infrastructure. Iran flatly denied that any direct talks with the US took place, with its foreign ministry saying only that messages were passed through third countries, and that its position on the Strait of Hormuz has not changed.
Reserve Bank Governor Anna Breman said the central bank will look through a short-lived oil shock and focus instead on whether it causes broader second-round inflation issues. She said the risk of persistent inflation is seen as lower than in (post-Covid) 2022 but the bank is still ready to lift the official cash rate (OCR) if medium-term inflation or expectations start to drift above the 2% midpoint.
Market leader Fisher & Paykel Healthcare declined 82c or 2.22% to $36.18; Gentrack fell 53c or 7.16% to $6.87; a2 Milk, which had outperformed the market, shed 37c or 3.28% to $10.90; and Auckland International Airport eased 17c or 2.1% to $7.93. Freightways and Mainfreight, both high fuel users, were down 33c or 2.6% to $12.35, and 80c to $57.21 respectively. In the energy sector, Meridian decreased 10c or 1.84% to $5.34; Mercury was down 19c or 2.97% to $6.27; and Contact shed 10c to $8.95. Serko was down 9c or 5.66% to $1.50; and property stocks Goodman Trust decreased 4c or 2.05% to $1.91 and Precinct shed 2c or 1.89% to $1.04.
Other decliners were cyclical stock Vulcan Steel falling 30c or 4.29% to $6.70; Ebos Group down 40c or 1.83% to $21.50; Westpac decreasing $1.50 or 3.08% to $47.21; SkyCity shedding 2c or 2.7c to 72c; Synlait giving up 2c or 4% to 48c; and Sky TV down 7c or 2.18% to $3.14.
KMD Brands, up $0.009 or 4.71% to 20c, has rejected an approach to split Rip Curl and merge it with US surfwear company Stokehouse Unlimited, with Stokehouse taking 22% in the new listed entity. KMD said the approach is not in the best interest of shareholders as it does not provide a clear path to enhance shareholder value. Smith said Stokehouse was not adding any capital, so the proposal seemed lopsided.
Hallenstein Glasson added 17c or 1.85% to $9.37; Summerset gained 22c or 2.42% to $9.31; Air New Zealand rebounded 1.5c or 1.92% to 43c; Fonterra Co-operative was up 8c to $6.30; Rua Gold increased 5c or 3.67% to $1.555; and Metro Performance Glass improved 2.5c or 2.65% to 97c.
Turners Automotive, up 7c to $8.52, said in its Investor Day presentation that it would achieve its target of $65m net profit before tax by the 2028 financial year, ahead of its schedule, and it had a new five-year target of $100m by 2031.
Californian electronics company Bourns has extended its takeover offer of Rakon at $1.55 a share to May 7 and, as of March 22, had received acceptances for 73.61% of Rakon's ordinary shares. Rakon was down 1.5c to $1.48.
Source: Business Desk
Australian Market Report
Ahead of the local open SPI futures were 7 points higher at 8398.
- close [Morningstar with AAP]: An early bounce for Australian shares has faded, as hopes of Middle East de-escalation crumbled on reports US Gulf allies were taking steps to enter the conflict.
After spiking 138 points at Tuesday's open, the S&P/ASX 200 ended the session 13.5 points higher, up 0.16 per cent, to 8,379.4, while the broader All Ordinaries gained 18.7 points, or 0.22 per cent, to 8,571.3.
Global equities had surged on easing oil prices, following disputed reports the US was in talks with Iranian officials, but confidence faded after Saudi Arabia reportedly took steps to give the US military access to one of its air bases.??
The WSJ also reported videos had shown missiles used in attacks on Iran had been launched from Bahrain.
Whether the conflict's next chapter was one of diplomacy or escalation, the ultimate key for markets was re-opening of the Strait of Hormuz, IG market analyst Tony Sycamore said.
"While that walking backward de-escalation has diffused the immediate 48-hour time bomb, the clock has really just been reset for Friday," Mr Sycamore told AAP.
"You've got that timeline also coinciding US elite marines and a couple of ships arriving in the region, which will certainly bolster the ability to open the Strait of Hormuz if diplomacy fails."
ASX-listed energy stocks eased 0.4 per cent over the session, with Santos weighing heavily after an unexpected outage at its Barossa project in the Timor Sea.
Santos shares dipped 2.6 per cent to $7.84, with no word from the gas explorer on when production would restart.
Elsewhere in energy, coal producers were mixed, while uranium stocks bounced modestly from recent falls.
The basic materials sector rebounded 2.9 per cent during the session, but it remains in bear market territory, down more than 20 per cent from record highs earlier in March.
Dip-buyers picked up Rio Tinto and BHP, both of which were trading at their own record peaks before the conflict.
Gold miners also staged a tentative comeback, as the precious metal recovered from hitting four-month lows on Monday to trade at $US4,358 ($A6,253) an ounce.
Gold prices have been pummelled as the fuel shock bolstered inflation expectations, cutting hopes of monetary easing and central bank gold buying in the US, while making the greenback more attractive to safe haven investors.
Australia's mining sector would likely remain under pressure until oil flowed freely through the Strait of Hormuz, Mr Sycamore said.
"We need our exporters to be able to get fuel in the in the tank to get our iron ore, gold, silver and copper over overseas," he said.
"So we're in a bit of a countdown here, which is obviously very dependent on the Strait, but we're right at the end of the (fuel supply) food chain."
With only two refineries still operating, Australia imports about 90 per cent of its fuel, mostly from key trading partners Singapore, South Korea, Malaysia and Japan.
"Not to be alarmist, but if Singapore gets a bit of fuel, they're probably not sending it here as their first priority, they're keeping it, and that's not a great situation to be in," Mr Sycamore said.
The heavyweight financials hinted at weaker investor sentiment, tumbling 1.3 per cent as ANZ eked a 0.5 per cent lift but its big four competitors tumbled.
The Australian dollar is buying 69.66 US cents, up slightly from 69.63 US cents on Monday at 5pm.
ON THE ASX:
The S&P/ASX200 gained 13.5 ??points, or 0.16 per cent, to 8,379.4
The broader All Ordinaries rose 18.7 points, or 0.22 per cent, to 8,571.3
The NZX 50 added 61.24 points (0.48%) to 12762.99
Companies commencing Ex-Dividend Trading Today (ASX 300):
Atlas Arteria
Flight Centre Travel Group Limited
Perenti Limited
Service Stream Limited
Overseas Market Report
[Morningstar with Dow Jones]:
U.S. stocks ended lower. The DJIA dropped 0.2% to 46,124.06, the S&P 500 declined 0.4% to 6,556.37 and the Nasdaq dropped 0.8% to 21,761.89.
Among S&P 500 companies, the top three gainers were Corning Inc GLW surging 8.43%, Hewlett Packard Enterprise Co HPE jumped 7.77%, and Dell Technologies Inc DELL lifted 7.49%.
The biggest decliners were Axon Enterprise Inc AXON which dropped 10.01%, The Estee Lauder Companies Inc EL fell 9.93%, and Coinbase Global Inc COIN lost 9.82%.
Asia
Chinese shares closed higher. The benchmark Shanghai Composite Index rose 1.8% to 3,881.28 and the Shenzhen Composite Index lifted 2.2% to 2,534.64.
Hong Kong shares ended higher. The benchmark Hang Seng Index rose 2.8% to 25,063.71.
Japanese shares ended higher. The Nikkei Stock Average added 1.4% to 52,252.28.
India shares ended higher. The BSE SENSEX gained 1.9% to 74,068.45.
Europe
Stocks in the U.K. finished higher. The FTSE 100 Index climbed 0.7% to 9,965.16. In Europe, shares closed mixed. The Germany's DAX dropped 0.1% to 22,636.91, and the France's CAC 40 lifted 0.2% to 7,743.92
