Market close: A2 Milk rises on takeover talk but sharemarket decline continues

A2 Milk rose 34c or 6.24 per cent to $5.79, however speculation of a takeover was met with scepticism from brokers. Photo / Getty Images

A stoic performance by the New Zealand sharemarket petered out – just when it looked like it was ignoring the extremely volatile bourses overseas.

The S&P/NZX 50 Index had positioned itself with a small gain after reaching an intraday high of 12,223.42 points. But in the last 45 minutes of trading including the matching session, the index plunged to 12,128.21, down 62.85 points or 0.52 per cent. It was the reverse of the drama on Wall Street.

There were 36 gainers and 109 decliners across the whole market, on improved volumes of 42.42 million share transactions worth $180.58 million.

Matt Goodson, managing director of Salt Funds Management, said: "I suspect the passive investment funds are back in buying the leaders in defiance of the volatile markets.

"Our market is still dependent on the macro-economic outcomes directed by the central banks and how Omicron plays out," he said.

In the United States, the leading indices were down between 3.4 per cent (Nasdaq) and 2.4 per cent (Dow Jones) during the day's eventful trading as investors feared the Federal Reserve's plans to hike interest rates will eat into corporate profits.

But then came a terrific turnaround in the last half hour of trading. The Dow Jones Industrial Average, at one stage falling more than 1000 points, closed with a 0.29 per cent gain to 34,364.50; S&P 500 Index increased 0.28 per cent to 4410.13; and the battered Nasdaq Composite, in correction territory, recovered 0.63 per cent to 13,855.13.

The Australian S&P/ASX 200 Index was down 2.68 per to 6948.2 points at 6pm NZ time after the latest statistics showed inflation was running at an unexpected 3.5 per cent – above the Reserve Bank of Australia's range of 2-3 per cent. The ASX index has fallen 6.22 per cent in the past five trading days.

Goodson said the higher-than-expected consumer price index number, led by steep rises in the cost of fuel and new homes, showed the Reserve Bank in Australia was significantly behind the inflation curve and it will have to tighten monetary policy sooner rather than later.

At home, there was speculation that Canadian dairy giant Saputo was eyeing a takeover bid for a2 Milk, which rose 34c or 6.24 per cent to $5.79. The speculation was met with scepticism from brokers here.

Goodson said the rumour was based on a loosely sourced article in Australia. "The story seemed lightweight, but you can never say never."

Contact Energy increased 25c or 3.29 per cent to $7.85 after providing a strong December operating report, with mass market electricity and gas sales reaching 288GWh compared with 286GWh the same month in 2020. Mercury was up 10c to $5.90.

Rakon rebounded by 18c or 11.11 per cent to $1.80; and Port of Tauranga increased 13c or 2.06 per cent to $6.43.

Auckland International Airport was up 14c or 1.94 per cent to $7.34 after announcing it was freezing aeronautical charges for the 2023 financial year, and prices from 2024 onwards would be determined after airline consultation.

Market leader Fisher and Paykel Healthcare was down 61c or 2.01 per cent to $29.75; Chorus plunged 26c or 3.74 per cent to $6.70; Fletcher Building declined 19c or 2.79 per cent to $6.63; Ryman Healthcare fell 35c or 3.24 per cent to $10.45; and Freightways decreased 14c to $12.05.

The banks had big falls on Australia's inflation news. ANZ Banking Group fell $1.23 or 4.14 per cent to $28.50, and Westpac Banking Corporation was down 76c or 3.4 per cent to $21.58.

The travel and leisure stocks again copped it. Serko fell 27c or 4.91 per cent to $5.23; Vista Group was down 14c or 6.45 per cent to $2.03; SkyCity Entertainment declined 8c or 2.78 per cent to $2.80; and Sky Network Television lost 6c or 2.5 per cent to $2.34.

Retailers Briscoe Group fell 22c or 3.54 per cent to $6, Kathmandu Holdings was down 5c or 3.62 per cent to $1.33; and The Warehouse Group declined 8c or 2.42 per cent to $3.22.

Kiwi Property, up 1c to $1.135, told the market that December sales at its mixed-use shopping centres increased 9.6 per cent compared with the same month in 2020. Sylvia Park sales growth was 11.7 per cent.

New listing Ventia Services Group declined 10c or 4.08 per cent to $2.35; Gentrack fell 10c or 5.46 per cent to $1.73; and Pacific Edge was down a further 5c or 4.24 per cent to $1.15.

Green Cross Health gained 3c or 2.61 to $1.18 after reporting a 14 per cent increase in revenue for the nine months ending December because of Covid-19 related activity. Net profit for the year ending March is expected to exceed the previous result by $4.5m-$6.5m.

Tourism Holdings-owned Action Manufacturing is buying MaxiTRANS' New Zealand business from Australia Trailer Solutions Group for $5.7m. Heavy transport manufacturer MaxiTRANS is expected to generate more than $18m revenue for the year ending June. Tourism Holdings share price was down 5c or 1.82 per cent to $2.70.

Synlait's director of strategy and business transformation, Chris France – who has been with the dairy company for seven years - has resigned, and Synlait's share price was down 16c or 4.65 per cent to $3.28.