“We have seen further interest rate increases by the Australian Reserve Bank, US Federal Reserve and European Central Bank. The hurdle just went up for investing globally.
“People are now asking whether the central banks have done enough and will start pausing the rate hikes.
“We are going into our own reporting season and companies are expected to be conservative in their outlook and earnings guidance. There are quite a few reasons for investors to stop and wait for further information and direction,” Solly said.
The local reporting season begins the week after next with eight companies providing their latest financial results.
The major US indices had their fourth consecutive day of declines, with regional banks again in the spotlight. PacWest Bancorp fell 50.62 per cent to US$3.17, and Western Alliance was down 38.45 per cent to US$18.20.
The Californian PacWest bank was understood to be assessing its strategic options, including a possible sale.
The Dow Jones Industrial Average was down 0.86 per cent to 33,127.74 points; S&P 500 declined 0.72 per cent to 4061.22; and Nasdaq Composite decreased 0.49 per cent to 11,966.4.
Dual-listed ANZ Banking Group was down 22c to $25.53 (reaching an intraday low of $24.77) after reporting a 12 per cent increase in cash profit of A$3.82 billion for the first half compared with the second half of the 2022 financial year. Statutory profit was A$3.54b, down 1 per cent.
The bank’s New Zealand arm had cash profit of $1.1b, up 1 per cent, and a 17 per cent decrease in statutory profit to $1b, which included gains and losses from economic hedges. ANZ NZ provided $11m interest-free funds and waived $1.3m in fees in February and March to customers impacted by the floods and cyclone.
Solly said the market was a little disappointed with the ANZ result, just like National Australia Bank earlier in the week. “Net interest margins are being squeezed and the outlook particularly in New Zealand is pretty cautious.”
Westpac Banking Corporation, down 10c to $22.80, reports its six-month result on Monday. Heartland Group declined 3c or 1.91 per cent to $1.54.
Fisher & Paykel Healthcare was down 27c to $27; Meridian Energy declined 10c or 1.83 per cent to $5.35; Mainfreight shed $1.10 to $71; and Auckland International Airport decreased 7c to $8.75.
The retirement sector was again weaker. Summerset Group was down 18c or 2.17 per cent to $8.12, and Ryman Healthcare declined 7c to $5.30.
Infratil decreased 13.5c to $9.255; Freightways was down 11c to $9.28; Skellerup Holdings declined 13c or 2.66 per cent to $4.75; Ventia Services fell 9c or 3.17 per cent to $2.75; AFT Pharmaceuticals shed 11c or 3.23 per cent to $3.30; ikeGPS was down 3c or 3.563 per cent to 82c; and Serko gave up 6c or 2.62 per cent to $2.23.
In the property sector, Kiwi was down 2.5c or 2.73 per cent to 89c; Argosy declined 1.5c to $1.09; and Precinct shed 2c to $1.23.
Synlait declined 5c or 3.38 per cent to $1.35, and a2 Milk was down 4c to $5.71. Synlait has fallen from $3.77 in mid-December and has slumped 59 per cent over the past 12 months.
Spark was up 1.5c to $5.17. The Commerce Commission gave Connexa clearance to buy the mobile tower assets of 2degrees for $1 billion. Spark, which is not funding the acquisition, will retain a 17 per cent shareholding in Connexa and Ontario Teachers’ Pension Plan, which is providing funding, will increase its holding to 83 per cent.
Other gainers were Hallenstein Glasson adding 11c to $6.76; Michael Hill up 2c or 1.89 per cent to $1.08; Move Logistics collecting 2c or 2.11 per cent to 97c; Delegat Group increasing 29c or 3.13 per cent to $9.55; and Comvita increasing 6c or 2.08 per cent to $2.94.
