Market close: NZ shares fall despite mighty afternoon recovery

KFC operator Restaurant Brands, set to benefit from Auckland's move to alert level 3, increased 31c to $15.80. Photo / NZME

The New Zealand sharemarket staged a mighty recovery after a sharp morning fall as uncertainty swirled around global markets and the Wall Street indices took a plunge.

The S&P/NZX 50 Index picked up 0.8 per cent in the afternoon and closed at 13,176.94, down just 1.63 points or 0.01 per cent for the day. There were 92 decliners and 39 gainers over the whole market on trade of 38.58 million share transactions worth $172.8 million.

Overnight, the Dow Jones Industrial Average dived 614 points or 1.78 per cent to 33,970.47 – its biggest fall since July 19 – the S&P 500 was down 1.7 per cent to 4357.73, and the Nasdaq Composite fell 2.19 per cent to 14,713.90 points, the latter two having their biggest one-day falls since May.

Global markets were rattled by the financial state of Chinese real estate giant Evergrande Group, which has liabilities of US$300 billion ($427b) – more than 6 per cent of China's property sector.

A third of the liabilities ($100b) is money loaned by banks already owned by Evergrande. The group said it had begun repaying some of its investors with real estate.

Evergrande's share price on the Hong Kong Hang Seng Index has fallen from HK$17.26 ($3.15) on January 19 to HK$2.28 (41c), and its market capitalisation has plunged from $60b to $5.5b.

Matt Goodson, managing director of Salt Funds Management, said there's a view that the Evergrande crisis will be contained and the Australian and New Zealand markets improved during the day.

"US futures were up half a per cent and the market clearly thinks Evergrande is not a Lehman Brothers moment. It appears to be a policy-induced move to retilt growth away from property speculation. Haven't we heard that before?" Goodson said.

The local market was also calmed by the comments from the Reserve Bank assistant governor Christian Hawkesby that in times of uncertainty the bank will continue to take a measured policy approach.

In the end, the market took all the uncertainty in its stride. Among leading stocks, Fisher and Paykel Healthcare was up 25c to $32.75 on heavy trade worth $47.92m; Mainfreight rose $1 to $92.40, KFC operator Restaurant Brands increased 31c to $15.80; and Ryman Healthcare gained 14c to $15.04.

Air New Zealand increased 3.5c or 2.29 per cent to $1.565; T&G Logistics was up 7c or 2.41 per cent to $2.97; and Vista Group rose 8c or 3.28 per cent to $2.52.

Fletcher Building fell 15c or 2.04 per cent to $7.22; Freightways declined 14c to $12.65; Ebos Group decreased 30c to $35.40; Contact Energy shed 7c to $8.20; and Trustpower was down 15c or 1.98 per cent to $7.43.

Napier Port declined 7c or 2.15 per cent to $3.19, Port of Tauranga was down 5c to $7.23.

Retailers Hallenstein Glasson fell 15c or 2.12 per cent to $6.94, Briscoe Group declined 7c to $6.93, and The Warehouse Group was down 5c to $3.73.

Kathmandu Holdings was unchanged at $1.46 after reporting a solid annual result, backed by better-than-expected Rip Curl sales, which increased 10.5 per cent. For the year ending July, Kathmandu's net profit increased 615 per cent to $63.43m on revenue of $922.79m, up 15 per cent.

Online sales now make up 14.4 per cent of the business, and profit for the first half of the 2022 financial year is expected to be below the same period last year because of the latest Covid lockdowns in Australia and New Zealand. Kathmandu is paying a final dividend of 3c a share on December 15.

Stride Property is withdrawing the demerger and initial public offer (IPO) for Fabric office fund because of market conditions. The purchase of 100 Carlton Gore Rd in Auckland was conditional on the completion of the IPO. Stride's share price was unchanged at $2.49.

Kiwi Property was unchanged at $1.17 after announcing it was developing 540 build-to-rent apartments worth $440m on its Sylvia Park and LynnMall properties in Auckland, making them retail, office and residential communities.

Metro Performance Glass fell 3.5c or 8.14 per cent to 39.5c after telling the market that the financial impact of the latest New Zealand lockdown was worse than in April last year, and its operating earnings (ebit) for the first half of the present financial year will be down about $10m. Metro is postponing the resumption of its dividend.

Other decliners were PGG Wrightson down 8c or 2.2 per cent to $3.55; Marlin Global fund falling 6c or 3.8 per cent to $1.52; Accordant Group, losing 12c or 6.67 per cent to $1.68; Gentrack decreasing 9c or 4.74 per cent to $1.81; Harmoney shedding 8c or 3.83 per cent to $2.01; and Rakon down 4c or 3.48 per cent to $1.11.