Market close: NZ stocks fall at start of another uncertain week

The local transport and logistics sector was shaken after FedEx shares plunged more than 21 per cent. Photo / AP

The two Feds, actually three, brought caution to the sharemarkets, and New Zealand shares were down nearly half a per cent at the start of another uncertain week.

The S&P/NZX 50 reached a morning high of 11,620.85 but dropped sharply in the afternoon, closing down 48.47 points or 0.42 per cent to 11,531.99.

There were 57 gainers and 86 decliners over the whole market on very light volume of 18.9 million share transactions worth $72.28 million.

Transport company FedEx, a United States benchmark stock, sent shivers through the markets at the weekend by signalling a sharp downgrade in quarterly earnings, and investors soon wondered whether the economy was in fact going into a recession.

The US Federal Reserve is meeting Thursday morning (NZ time) and is expected to hike its official rate another 75 points to combat inflation. And of course, some would have been concerned about Roger Federer – arguably the greatest male tennis player – announcing his retirement from competition.

The slowdown in parcel and cargo deliveries meant FedEx is expecting earnings per share to fall 19 per cent to US$3.33 ($5.57) in the first quarter, compared with the previous corresponding period, and some distance from its forecast of US$5.14.

The air division missed its own quarterly revenue forecasts by some US$500m. FedEx is closing 90 offices, putting in a hiring freeze, reducing flights and grounding aircraft.

FedEx shares plunged more than 21 per cent to US$161.02, the biggest one-day drop since it listed in 1978.

The transport and logistics sector was shaken. At home, Freightways declined 25c or 2.31 per cent to $10.57, and Mainfreight was down $1 to $71.50.

Shane Solly, portfolio manager with Harbour Asset Management, said FedEx was a bellwether stock and was sensitive to any slowing in the economy.

"We've seen the sector come off globally, but I expect Mainfreight and Freightways to be more resilient given their mix of business is different. They should weather any slowdown much better," he said. "The market at the moment is just a little wary and focused on the macro-economic activity."

Ryman Healthcare gained 10c to $9.05. Solly said prices for their retirement units were still increasing and its business is holding up well.

Ebos Group was up 42c to $38.47; a busier Auckland International Airport increased 5c to $7.66; Napier Port gained 4c to $3.04; AFT Pharmaceuticals added 8c or 2.35 per cent to $3.48; NZME collected 3c or 2.52 per cent to $1.22; and Scott Technology was up 6c or 2.08 per cent to $2.95.

Synlait Milk, gaining 6c to $3.57, has completed two key decarbonisation projects – commissioning the country's first large-scale electrode boiler at the Dunsandel plant, and converting boiler two at the same plant from coal to biomass (wood pellets).

Other gainers were Accordant Group, up 6c or 3.33 per cent to $1.86; T&G Global also increasing 6c or 2.27 per cent to $2.70; Gentrack improving 3c or 2.24 per cent to $1.37; Harmoney adding 2c or 2.56 per cent to 80c; and PaySauce up 1.5c or 5.08 per cent to 31c.

Contact Energy, unchanged at $7.85, is planning a five and a half year fixed-rate green bonds offer and full details are expected to be released on September 27.

KMD Brands (formerly Kathmandu) declined 3c or 2.91 per cent to $1 on the eve of releasing its latest annual financial result. Hallenstein Glasson was down 5c to $5.30.

Spark was down 7c to $5.03, a2 Milk decreased 9c to $6.15; Vector shed 7c to $4.341; Air New Zealand declined 1.5c or 2.16 per cent to 68c; Skellerup Holdings fell 14c or 2.44 per cent to $5.60; Eroad was down 10c or 5.71 per cent to $1.65; and Vital Healthcare dropped 4.5c to $2.70.

Cancer diagnostic firm Pacific Edge was down another 3c or 5.88 per cent to 48c, after reaching a high of $1.56 in late September last year.

Other decliners were Sanford, down 10c or 2.35 per cent to $4.15; South Port, decreasing 15c or 1.80 per cent to $8.20; Steel & Tube, losing 3c or 2.1 per cent to $1.40; Serko, giving up 15c or 4 per cent to $3.60; Vulcan Steel, shedding 13c to $8.40; and Ventia Services down 4c to $3.10.

New Zealand Oil & Gas, down 0.005c to 43.5c, has signed a one-year agreement involving joint venture partners to supply gas at a fixed price to Shell Energy Australia from the Mereenie field, beginning the start of next year. NZOG has a 25 per cent stake in Mereenie.