Global stock rout hits NZ, Nikkei and ASX as recession fears grow

F&P Healthcare, which derives about half its sales from the US, dropped 3% to $31.78. Photo / Greg Bowker

New Zealand shares joined a global rout as markets across Asia felt the brunt of Friday’s weak US jobs report, which stoked fears of a recession in the world’s biggest economy and dented exporters exposed to America, such as Fisher & Paykel Holdings.

The S&P/NZX 50 Index dropped 188.55 points, or 1.5%, to 12,264.49, a two-and-a-half-week low. The main board was a sea of red, with 111 stocks declining, 44 unchanged and just 24 gaining. Turnover was $172.3 million, more than July’s daily average value of $137m.

New Zealand’s stock market was the first to open this week after Friday’s sharp decline on Wall Street, when US non-farm payrolls, a higher unemployment rate than anticipated, raising fears of recession pushed the Nasdaq 10% of its peak and into correction territory.

“It’s coming from all directions really – there’s a bit more concern about the US economy and a potential recession,” said Grant Davies, an investment adviser at Hamilton Hindin Greene. “New Zealand markets had a really good July and we’re giving a little bit back at the moment.”

Stock markets across Asia were hit, with Japan’s Nikkei 225 index shedding 7% as it hit a seven-month low in afternoon trading, Australia’s S&P/ASX 200 index falling 2.8%, and India’s BSE Sensex declining 1.8%.

A soggy Kiwi dollar – trading at 59.43 US cents at 5pm – wasn’t enough to ease the pressure on exporters exposed to the US.

F&P Healthcare, which derives about half its sales from the US, dropped 3% to $31.78. The healthcare products maker’s rival ResMed reported stronger-than-expected fourth-quarter sales last week, while Ozempic maker Novo Nordisk – whose weight-loss treatments are seen to be easing sleep apnoea severity – is due to report its earnings later this week.

Among other exporters to decline, national carrier Air NZ fell 3.4% to 56.5 cents on a volume of 1.8 million shares, cinema software analytics firm Vista International – which reports its earnings tomorrow – decreased 2.5% to $2.36, seafood group Sanford slipped 2.2% to $4.10, logistics group Mainfreight declined 2.2% to $73.15, transport telematics firm Eroad dropped 1.5% to $1.31, while winemaker Foley Wines sank 8.3% to 77 cents.

Dual-listed Australian bank ANZ Group led the benchmark index lower, falling 5.4% to $30.01 while Westpac Banking Corp declined 2.6% to $30.19. Their rival Commonwealth Bank of Australia, the parent of ASB Bank locally, will report its earnings next week, while financial services firm AMP reports later this week. The Reserve Bank of Australia will review its cash rate on Tuesday and is expected to keep it unchanged.

Local lender Heartland Group, which secured an Australian banking licence this year with its acquisition of Challenger Bank, slipped 0.9% to $1.08.

Arvida – which is under a takeover offer at $1.70 a share – was the most traded stock, ending the day unchanged at $1.63 with 6.2 million shares changing hands, while Ryman Healthcare declined 0.9% to $4.48 on a volume of 5.3 million. Oceania Healthcare slipped 2.5% to 77 cents on a volume of 1 million.

Auckland International Airport declined 1.5% to $7.44 on a volume of 3.4 million shares, while Contact Energy rose 0.5% to $8.49 with 1.9 million shares and Spark NZ increased 0.5% at $4.42 on a volume of 2.2 million.

Kiwi Property Group fell 3.4% to 86 cents on a volume of 1.2 million and Fletcher Building was unchanged at $3.13 with 1.1 million shares changing hands.

Manawa Energy posted the day’s biggest gain on the benchmark index, up 2.3% at $4.44, while Sky Network Television rose 2% to $2.60.

Stock market operator NZX rose 0.8% to $1.22. Its July operating metrics showed trading values and volumes in the year-to-date remained weaker than the prior period.

Still, comments from Finance Minister Nicola Willis on the weekend that the Government is exploring options to capitalise Kiwibank could provide a boost to the bourse, which has been struggling to attract new listings.

Being AI was unchanged at 3.5 cents after announcing a conditional joint venture with Spectrum Consulting to develop an AI tool to protect data sovereignty.