Market close: Energy, property stocks in the red as markets continue to drift

Contact Energy's Clyde power station. Contact was down 21c or 2.81 per cent to $7.27. Photo / Grant Bradley

Interest-rate sensitive energy and property stocks were again hit as the New Zealand sharemarket, down nearly 1 per cent, braces for another round of official cash rate hikes.

The Reserve Bank of Australia goes first and then New Zealand's Reserve Bank follows on Wednesday, and both central banks are expected to deliver a further 50 basis points increase in their cash rates, to 2.85 per cent and 3.5 per cent respectively.

New Zealand's inflation rate is at a 32-year high of 7.3 per cent, while Australia's was 6.1 per cent at the end of the June quarter.

The S&P/NZX 50 Index had a steady morning but dropped sharply in the afternoon, closing down 106.26 points or 0.96 per cent to 10,959.45 and reaching a two-month low.

There were 59 gainers and 82 decliners over the whole market on volume of 21.9 million share transactions worth $84.62 million.

Jeremy Sullivan, investment adviser with Hamilton Hindin Greene, said it was another day with plenty of red on the screen.

"It's just more of the same bad news with inflation and interest rates keeping on going up. Until we see some evidence that inflation is weakening, the markets will continue to drift."

Sullivan said the property sector has had a hard time and this is also flowing into the energy sector.

One of the United States Federal Reserve's preferred measures of inflation, the personal consumption expenditure price index, rose higher than expected to 0.3 per cent in August, making an annual increase of 6.2 per cent.

The US major indices quickly went on the back foot again. The Dow Jones Industrial Average went under 29,000 points for the first time since November 2020, declining 1.71 per cent to 28,725.15.

The Dow Jones was down 8.8 per cent in September, S&P 500 declined 9.3 per cent and Nasdaq Composite fell 10.5 per cent.

The crude oil price was down at US$81.19 a barrel, after reaching US$79.09. The NZ dollar was trading at US56.24c against the American greenback, recovering from an intraday low of US79.09c.

At home, Contact was down 21c or 2.81 per cent to $7.27; Mercury fell 13c or 2.28 per cent to $5.57; Manawa decreased 9c to $5.63; Meridian declined 2c to $4.78; but Vector was up 10c or 2.48 per cent to $4.14.

Precinct Properties told the market that professional services consulting firm Beca will be leasing two of its new green star buildings in Auckland's Wynyard Quarter, taking up 14,409 sq m of office space. Beca will be moving its global headquarters across town in 2025.

The property sector, like energy, was again hit by the rising interest rates. Precinct was down 5c or 3.85per cent to $1.25; Vital Healthcare Trust fell 12c or 4.71 per cent to $2.43; Kiwi declined 3.5c or 3.83 per cent to 88c; Argosy decreased 2.5c or 2.08 per cent to $1.75; and Stride lost 7c or 4.19 per cent to $1.60. Investore was up 1c to $1.53.

After renewing its infant milk formula distribution arrangements with China State Farm Agribusiness for a further five years, a2 Milk was down 1c to $6.11 and it reached an intraday high of $6.35. Synlait was down 5c to $3.50.

Summerset Group fell 40c or 3.71 per cent to $10.38; Mainfreight was down $1.20 or 1.78 per cent to $66.20; Skellerup decreased 19c or 3.53 per cent to $5.29; Port of Tauranga declined 9c to $6.36; and Air New Zealand was down 1.5c or 2.1per cent to 70c.

Fisher and Paykel Healthcare moved off its low, gaining 7c to $18.57 on trade worth $11.5m.

Cancer diagnostic firm Pacific Edge neared its two-year low of 44c, set on August 30, by declining 3c or 6 per cent to 47c.

Scales Corporation was down 19c or 3.84 per cent to $4.76; Serko declined 10c or 3.13 per cent to $3.10; Tourism Holdings decreased 7c or 2.5 per cent to $2.73; Napier Port was down 7c or 2.43 per cent to $2.81; Winton Land dropped 9c or 3.35 per cent to $2.60; and Accordant Group fell 9c or 5.11 per cent to $1.67.

Amongst the gainers, Ventia Services was up 7c or 2.41 per cent to $2.97; Scott Technology rose 9c or 3.21 per cent to $2.89; AFT Pharmaceuticals increased 6c or 1.82 per cent to $3.36; Evolve Education gained 3c or 4.48 per cent to 65c; Bremworth collected 2c or 3.85 per cent to 54c; Plexure added 1.5c or 4.69 per cent to 33.5c; and Savor was up 2c or 5 per cent to 42c.

Amongst the retailers, KMD Brands decreased 3c or 2.86 per cent to $1.02; Briscoe Group lost 9c to $5.20; and Michael Hill improved 3c or 2.29 per cent to $1.34.