Other large cap US listed and global banks followed suit, with Citigroup, Wells Fargo and Goldman Sachs all experiencing losses of close to 5 per cent at the time of writing.
Stock movements this morning were led by First Republic Bank, down 20 per cent, along with a raft of energy stocks which fell with the declining oil price. Crude was down roughly 6 per cent at the time of writing.
Hailburton Co, Marathon Oil and Devon Energy all lost close to 9 per cent at the time of writing.
A surprise outperformance came from Netflix, landing on a 2.4 per cent uplift at around 7am NZT.
Rest of the World
UK finance Minister Jeremy Hunt issued a statement, aligning with the release of the new UK budget, that the economy would no longer enter a technical recession (two quarters of consecutive negative economic growth) this year, based on new forecasts.
Other changes in the budget came in the form of raising the pension allowance for higher earners, in an attempt to persuade extended working tenures and improve the country’s worker shortage.
A targeted support package was announced for working parents, many of whom have not returned to the UK in the hope of avoiding the area’s incredibly high childcare costs.
Mixed economic data out of China may have sparked global investor optimism about China’s re-opening following an end to Covid restrictions in December.
Data for the first two months of the year included retail sales increasing 3.5 per cent on the same period last year, more than offsetting a 1.8 per cent drop in December, while industrial output rose at a rate slightly below expectations with just a 2.4 per cent increase for the two-month period.
Commodities
Oil prices continue to slide amid increasing concern over the world economy, and hence demand for transportation and shipping, following the well-publicised Silicon Valley Bank collapse. Brent Crude now trades at US$73, down from lofty highs of around US$85 last week.
Increasing risk of oversupply, OPEC forecast the oil markets are likely headed for a mild oil surplus for the second quarter of the year, with 28.92 million barrels per day equating to roughly 300k barrels more than expected in a quarter which usually experiences a seasonal fall in demand.
New Zealand
New Zealand equities reacted to several operational and earnings announcements at market open. Most notably, large-cap electricity generation/retailers Meridian Energy and Contact Energy released operating reports for the month of February.
Meridian’s highlights from February included ebitda of $25m, down from a strong prior period in February last year ($45.4m), with year-to-date ebitda closely tracking 2022, sitting at $519m vs $534m.
The result could largely be attributed to hydro volume down 14 per cent on the previous comparative period (PCP) while total electricity generation was also down 12.9 per cent. Investors reacted negatively to Meridian’s release as the stock closed down 2.7 per cent, now trading at $5.07.
Alternatively, Contact Energy found a mild 0.7 per cent increase, with its ebitda for February broadly in line with a PCP of $34.7m and despite the company tracking well behind the year-to-date ebitda tally versus the PCP.
In the period, total generation was also 5.7 per cent lower than February last year but benefited from a slighter higher weighted average price (generation weighted average spot price or GWAP of $152/MWh vs $139 in the PCP).
Customer connections also grew from 568,000 to 583,000 over the last 12 months.
Briscoe Group, with its year end at 29 January, was the lone equity to publish a full year result on Wednesday, ultimately landing up 2.3 per cent by the end of the day’s trading.
The result read broadly in line at the earnings level, but investors may have been enthusiastic about the 16 cents per share dividend, an increase on last year’s 15.5 cents per share. No explicit trading commentary or guidance was provided.
Australia
The ASX 200 finished higher by 0.8 per cent, lifted by gains in many of the large and smaller cap tech names.
Block Inc, parent company to buy-now-pay-later staple Afterpay, leapt 3.9 per cent, while Pexa Group and Kiwi-founded accounting software company Xero also impressed with 6.5 per cent and 4.0 per cent gains of their own.
Leading the news was a further development in the proposed A$35b sun cable project, which plans to build an electricity cable between Darwin and Singapore in the hope of enabling solar power exports from a local Australian solar farm to the southeast Asian country.
The project had been forced into administration in the wake of disagreements between billionaire partners Mike Cannon Brookes and Andree Forrest, doubting the viability of the project.
Administrators are now seeking bids from interested parties, with rumours of potential enquiries from Macquarie’s infrastructure arm and Canadian asset manager Brookfield, among others.
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