Keeping you up to date with the latest market moves, in association with Investment firm Jarden
The NZX 50 fell by 0.7 per cent yesterday, in the red for the second
day this week.
Consumer non-cyclicals fell 1.9 per cent and healthcare declined by 1.5 per cent. On the positive side, energy rose 1.8 per cent and financials gained 1.1 per cent.
It was a day of poor performance for the large cap stocks with the NZX 10 down by 0.9 per cent.
Film software company Vista Group International was the standout performer yesterday, up 3.0 per cent and continuing to gain since its recent mid-July trough. Another outperformer was donations company management Pushpay Holdings which rose 2.3 per cent. Rounding out the top three was Z Energy, up 1.8 per cent after media reports speculated that it was a 'sitting duck' for a takeover.
A2 Milk was the worst performer again yesterday, down 4.0 per cent, following Monday's 6.4 per cent slump. This came after the Commonwealth Bank of Australia sold a portion of its A2 Milk holding, ceasing to meet the 5 per cent threshold of a substantial holding. In addition, export data released by Stats NZ on Monday showed national infant formula exports dropping by a significant 25.4 per cent in June year on year.
Precinct Properties fell by 2.4 per cent. The company announced it is set to produce its full year financial results for the year ended 30 June 2021 on Thursday 12 August.
Mercury NZ also dipped 2.1 per cent, with some gentailers seeing share price pressure on a softening electricity spot price.
All major US indices were trading lower overnight. The S&P 500 decreased by 1.0 per cent, the DJIA was down 0.7 per cent, and the NASDAQ declined by 1.9 per cent.
Technology and consumer discretionary stocks were dragging the markets down, with sector indices decreasing by 1.5 per cent each. On the flip side, utilities and real estate were performing well, up 1.8 and 0.8 per cent, respectively.
The best performer of the session was F5 Network, increasing 6.0 per cent. The application services provider beat analysts' earnings forecast by 30 cents per share.
Water treatment company Pentair was also posting gains, up 4.1 per cent and hitting a new 52-week high after its earnings announcement before market open.
Rounding out the leader board was global fintech and payments company, Fiserv, rising 3.0 per cent.
The single stock biggest loser of the day was food processing company Lamb Weston Holdings plummeting 13.6 per cent. The frozen potato chip maker announced it will be investing US$415 million into a new processing plant, along with a fourth quarter earnings result of 44 cents per share.
Package delivery company United Parcel Service (UPS) underperformed despite beating analysts' expectations in its earnings announcement. The company stated that parcel deliveries across the US were slowing down, at about a 3.0 per cent year-on-year decline.
Joining the underperformers was video game producer, Activision, decreasing 6.8 per cent after a petition from more than 2,000 of its employees denouncing the company's 'abhorrent' response to sexual harassment claims.
On Tuesday, the International Monetary Fund warned that there is "a risk that transitory pressures could become more persistent". This would indicate that central banks might need to take action - for example, by the tapering of market-friendly stimulus like asset purchases. The IMF kept its global growth forecast at 6.0 per cent for 2021 and updated its 2022 forecast from 4.4 to 4.9 per cent.
Rest of the world
Overnight, the major Asian indices showed a similar pattern to the previous session. The Nikkei posted further gains, up 0.5 per cent, while the Hang Seng, the Shanghai index, and the Shenzhen, dropped 4.2, 2.5, and 3.7 per cent, respectively.
The decline in the Hong Kong and Chinese indices was led by the continued dive in prices across the technology sector.
Gold slightly recovered, creeping up 0.1 per cent to US$1,801 per ounce.
Oil declined a further 0.2 per cent and was trading at US$71.79 per barrel.
Cryptocurrencies were all in the red this morning after a surge over the weekend, with Bitcoin declining 5.8 per cent and Ethereum dropping 7.3 per cent.
The US 10-year treasury rate declined slightly due to inflationary pressures, yielding 1.239 per cent.
The ASX 200 was up 0.5 per cent as miners thrived on recovering commodity prices.
Unsurprisingly, basic materials was the best performing sector on the day, up 1.7 per cent. Energy was the next best performing sector, up 1.2 per cent for the session.
Copper miner and processor OZ Minerals, up 6.5 per cent, and steel producer Bluescope steel, up 6.4 per cent, were the best performing stocks on the day. Oz Minerals released its second quarter production statistics, which featured copper production up 33 per cent quarter on quarter and increased second half gold output forecast. Bluescope traded up on its third upgrade for full year 2021 earnings before interest and taxation, now expected to be A$1.72 billion.
Copper and steel have benefitted in fits and starts as the 'reopening' trade swings in and out of vogue. The theory goes that a wave of deferred capital expenditure, post-reopening stimulus and a climate driven green energy revolution will combine to produce a wave of demand for construction materials.
For the second day in a row, academic and educational services was the worst performing sector, down 2.2 per cent. The market is still digesting news that companies providing tutoring services will be forced to run as not-for-profit organisations. Sectors and stocks similarly exposed to China have sold off in the face of the spectre of regulation. IELTS provider IDP Education, for example, was down 2.2 per cent today.
For the second day in a row, embattled hotel and casino operator Crown Resorts has been amongst the worst performers, down 5.5 per cent. The market continues to digest news around the elongation of the New South Wales government investigation into the organisation's conduct, as well as the fact that Star Entertainment pulled its A$6.6 billion bid for the company late last week.
Analytics company Nuix was also an underperformer, down 4.5 per cent over the course of the day. Though no seemingly market sensitive information was released yesterday, ASIC is currently investigating whether Nuix's initial public offering contained false statements.
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Disclaimer: This Morning Brief has been prepared in good faith and reflects opinions and views at the time of publication, using external sources, systems and other data and information we believe to be accurate, complete and reliable at the time of preparation. We make no representation or warranty as to the accuracy, correctness and completeness of that information, and will not be liable or responsible for any error or omission. This Morning Brief is not to be relied upon as a basis for making any investment decision. Please seek specific investment advice before making any investment decision. Jarden Securities Limited is an NZX Firm, a broker disclosure statement is available free of charge at www.jarden.co.nz. Jarden is not a registered bank in New Zealand. Full disclaimer available at: https://www.jarden.co.nz/limitations-and-disclaimera>