Retailers Deliver As Market Heads For Worst Month Since 2022

Two main retailers posted decent half-year financial results as consumer confidence slips and the New Zealand sharemarket faces its worst trading month in years. The S&P/NZX 50 Index had a choppy session on Friday, fluctuating between 12,861.32 and 12,979.52, and closed at 12,935.39, down 41.6 points or 0.32%. The index was down 1.1% for the week and has fallen 5.7% this month during the Middle East conflict, with two trading days remaining. The previous worst month was January 2022 when the index fell 8.8%. So far this year, the index has declined 4.5%. There were 99 decliners and 46 gainers on the main board, with volumes reaching 41.44 million shares worth $140.12 million.

The oil price climbed further to US$107.2 a barrel, and the US markets went down.

At home, the ANZ-Roy Morgan Consumer Confidence fell nearly 9 points from 100.1 in February to 91.3 in March because of the uncertainty over the Middle East conflict. The proportion of households thinking it’s a good time to buy a major household item (the best retail indicator) fell 10 points to minus 14, back where it was in October. And perceptions regarding the economic outlook over the next 12 months were down 17 points to minus 25%. ANZ said the conflict is hitting people in the back pocket already. “Confidence impacts are likely to exacerbate the impact on growth, but it is entirely reasonable that both firms and households think twice when making spending decisions in case things take a marked turn for the worse.”

On the market Fisher and Paykel Healthcare was down 10c to $37.20; Freightways declined 28c or 2.23% to $12.30; Contact Energy decreased 14c to $9.09; Gentrack fell 36c or 5.06% to $6.75; and Mainfreight shed $2.69 or 4.36% to $59.01. Infratil added 25c or 2.18% to $11.71; Fonterra Co-operative was up 11c or 1.82% to $6.16; a2 Milk increased 38c or 3.45% to $11.41; and Ebos Group gained 60c or 2.73% to $22.60.

Clothing retailer Hallenstein Glasson increased 20c or 2.07% to $9.85 after reporting a 14.6% increase in revenue to $275.19 and a 32% rise in net profit to $28m for the six months ending February 1. It is paying an interim dividend of 29c a share on April 24. Australian Glassons store sales rose 22.4% to $151.8m, and New Zealand $61.9m, up 8.2%. Hallensteins in both countries had revenue of $61.5m, up 4.5%. Gross margin on sales increased to 60.9% from 58.5% in the previous corresponding period. Hallenstein Glasson said group sales for the first seven weeks were up 20.1%, supported by the stronger Australian dollar and new and refurbished stores, but it will be much more difficult to replicate the current growth in the months ahead.

The Warehouse was up 4.5c or 6.92% to 69.5c after reporting steady revenue of $1.61 billion and a 33.6% rise in net profit to $15.74m on disciplined cost control for the six months ending February 1. The Warehouse had sales of $949.5m, up 0.5%; Warehouse Stationery $116.1m, a gain of 5.7%; and Noel Leeming $542.2m, down 1.2%. Gross profit margin was down 20 basis points to 32.2%.

KMD Brands remained in a trading halt and asked for a voluntary suspension on the ASX while it sorted a proposed capital raise and refinancing of its existing banking facilities. KMD now expects to release full details, including its half-year financial results, on Monday. The stock last traded at 19.5c.

Source: Business Desk

Ahead of the local open SPI futures were 5 points higher at 8529.

- close [Morningstar with AAP]: Australia's share market has snapped a three week losing streak, but uncertainty hangs over investor sentiment as an oil supply route remains effectively blocked.

The S&P/ASX fell 9.4 points on Friday, down 0.11 per cent, to 8,516.3, as the broader All Ordinaries lost 13.7 points, or 0.16 per cent, to 8,712.8.

It was the first positive week for the bourse since US-led attacks on Iran sparked an energy price shock that has roiled global markets, but traders remain on edge with scarce common between the US and Iran to build a ceasefire upon.

More than $242 billion in value has been wiped from the local exchange's combined market capitalisation since the conflict began on February 28, although that figure was closer to $300 billion earlier this week.

"The key for global growth is to watch passageway through the Strait of Hormuz," AMP deputy chief economist Diana Mousina said.

"The longer this goes on, oil reserves will dwindle and shortages will become more of a problem and the oil price will spike higher."

Unsurprisingly local energy stocks outperformed the other 10 sectors, as Brent crude hovered above $US101, supporting local oil and gas giants Santos and Woodside.

Coal producers were also strong, with Whitehaven up almost fiver per cent after an upgrade from UBS, while uranium stocks faded from recent strength as risk sentiment dimmed.

Viva Energy and Ampol, which run Australia's two remaining oil refineries, each made ground on Friday and are up more than 38 per cent and 16 per cent respectively since the Iran conflict began.

Basic materials snatched their first positive week of the previous four, edging higher on Friday with help from mega miners BHP, Rio Tinto and Fortescue, as gold producers and most other sub sectors fell behind.

Gold is trading at $US4,442 ($A6,443) an ounce, hovering on par with its early January price and down roughly a quarter from all-time highs.

Lithium miners provided some relief, with Liontown and PLS each up more than 25 per cent for the week, as rising fuel prices fan interest in electric vehicles and electrification.

ASX-listed airlines were back in the red, with Qantas down 0.7 per cent and Virgin, which ordinarily runs direct flights to the Middle East, sinking 4.4 per cent.

The heavyweight financials sector has been just that, rounding out a fifth straight week of losses and down six per cent from mid-February's record peak.

Australia's consumer cyclicals sector snapped a nine-week losing run, the sector hanging on at a value on par with June 2024.

Consumer confidence was already under pressure before the Persian Gulf conflict lit a match under oil prices, sending inflation expectations soaring and pushing the Reserve Bank towards further interest rate hikes.

The combination of higher interest rates and inflation was likely to weigh on sentiment and economic growth, ANZ economists said.

"Real GDP growth is now expected to be 1.3 per cent year-on-year over 2026 and 1.8 per cent year-on-year in 2027, a material downward revision from our most recent forecasts," they wrote in a report.

The Australian dollar is buying 68.98 US cents, down from 69.47 US cents on Thursday at 5pm.

ON THE ASX:

The S&P/ASX200 dropped 9.4 points, or 0.11 per cent, to 8,516.3

The broader All Ordinaries fell 13.7 points, or 0.16 per cent, to 8,712.8

The NZX 50 Lost -105.61 points (-0.82%) to 12829.78

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[Morningstar with Dow Jones]:

U.S. stocks ended lower. The DJIA declined 1.7% to 45,166.64, the S&P 500 slipped 1.7% to 6,368.85 and the Nasdaq slipped 2.1% to 20,948.36.

Among S&P 500 companies, the top three gainers were Entergy Corp ETR surging 6.82%, Brown-Forman Corp BF.B jumped 5.63%, and The Campbell's Co CPB lifted 4.96%.

The biggest decliners were Datadog Inc DDOG which dropped 7.90%, Moderna Inc MRNA fell 7.49%, and Coinbase Global Inc COIN lost 7.06%.

Asia

Chinese shares closed higher. The benchmark Shanghai Composite Index added 0.6% to 3,913.72 and the Shenzhen Composite Index climbed 1.3% to 2,579.55.

Hong Kong shares ended higher. The benchmark Hang Seng Index lifted 0.4% to 24,951.88.

Japanese shares ended lower. The Nikkei Stock Average slipped 0.4% to 53,373.07.

India shares ended lower. The BSE SENSEX declined 2.2% to 73,583.22.

Europe

Stocks in the U.K. finished flat. The FTSE 100 Index was unchanged at 9,967.35. In Europe, shares closed lower. The Germany's DAX dropped 1.4% to 22,300.75, and the France's CAC 40 slipped 0.9% to 7,701.95