Investors go bargain hunting in retail stocks; Vulcan Steel falls after downgrade - Market close

Vulcan Steel fell 46c or 5.48 per cent to $7.94 after two brokers downgraded the stock on earnings risk.

An uncertain New Zealand sharemarket was again lower, giving up well-earned gains from the day before, but there was some bargain hunting in cyclical retail stocks.

The S&P/NZX 50 Index treaded softly and closed at 11,803.28, down 49.52 points or 0.42 per cent after previously rising 0.48 per cent.

There were 74 gainers and 61 decliners on the main board with 29.19 million shares worth $95.67m changing hands.

Paul Robertshawe, chief investment officer with Octagon Asset Management, said the market was operating on heightened uncertainty with recent economic news supporting a weaker outlook.

“How long this will last, who knows. The latest Centrix data shows a few thousand more people in debt, and I read that 18 per cent of disposable income is now going into mortgages,” he said.

“People are watching their pennies and the market is fighting for discretionary spending. Three retailers are doing well today, showing some cyclical stocks are attractively priced.”

Robertshawe said the Air New Zealand earnings downgrade won’t be the last for cyclical companies – “we have known this” – and it should bring forward an easing in monetary policy.

The major US indices, more settled as the Middle East tension eased, were back in business with the Dow Jones Industrial Average up 0.67 per cent to 38,239.98 points; S&P 500 increasing 0.87 per cent to 5010.6; and Nasdaq Composite rising 1.11 per cent to 15.451.31.

All eyes are on electric vehicle maker Tesla which is expected to report a 40 per cent fall in operating profit and its first quarterly revenue decline in four years. Tesla has cut vehicle prices globally on slowing demand, and its share price fell 3.4 per cent to a 15-month low of US$142.05.

Across the Tasman, the S&P/ASX 200 Index was up 0.35 per cent to 7676.2 points at 6pm NZ time.

At home, manuka honey retailer Comvita increased 4c or 1.97 per cent to $2.07, Michael Hill jeweller gained 2c or 2.86 per cent to 72c after rising 4.48 per cent the day before. KMD Brands (formerly Kathmandu) was up 1c or 1.85 per cent to 55c.

Ryman Healthcare was down 15c or 3.42 per cent to $4.23. Robertshawe said there was a delayed reaction following Ryman’s management changes.

Vulcan Steel fell 46c or 5.48 per cent to $7.94 after two brokers downgraded the stock on earnings risk.

Auckland International Airport declined 18c or 2.26 per cent to $7.79; Freightways was down 24c or 2.75 per cent to $8.50; Argosy Property shed 3.5c or 3.06 per cent to $1.11; Serko decreased 8c or 2.35 per cent to $3.33; and Oceania Healthcare was down 2c or 3.28 per cent to 59c.

Wine exporter Delegat Group declined 20c or 2.88 per cent to $6.75; The Warehouse was down 7c or 4.9 per cent to $1.36; Smartpay shed 2.5c or 1.79 per cent to $1.37; NZX eased 2c or 1.74 per cent to $1.13; ikeGPS decreased 2c or 4.43 per cent to 43c; and 2 Cheap Cars was down 3c or 3.66 per cent to 79c.

Fisher and Paykel Healthcare was up 10c to $26.54; a2 Milk increased 9c to $6.36; Skellerup gained 10c or 2.3 per cent to $4.45; Gentrack added 12c to $8.12; Eroad was up 4c or 4.71 per cent to 89c; and Third Age Health improved 3c or 1.8 per cent to $1.70.

Sky TV, up 1c to $2.85, has expanded its content agreement with BBC Studios with British programmes being screened across Sky Box, Sky Pod, streaming service Neon and free-to-access Sky Open.

AoFrio (formerly Wellington Drive Technologies) rose 0.008c or 15.38 per cent to 6c after reporting a 13 per cent increase in revenue to $16.6m for the first quarter compared with the previous corresponding period.

Internet of Things revenue was $9.9m (2023 $9.9m) and sales of motor products were $6.7m (2023 $5.3m). Operating earnings (ebitda) was $200,000 compared with the previous loss of $400,000, and AoFrio maintained its full-year revenue guidance of $70m-$80m, 13 per cent ahead of the previous year.

TradeWindow, up 0.001c to 20c, has completed its $2.2m capital raise and secured a new institutional investor that took 25 per cent of the share placement.

Blackwell Global, unchanged at 0.003c, is changing its name to RTO Limited on May 1 following the resignation of director Michael Chai at the request of the independent members of the board. Blackwell said it wished to separate the activities of Chai, who is also a director of the company’s major shareholder.