Market close: Omicron plays havoc with NZ sharemarket

Travel and leisure stocks suffered. Photo / NZME

The New Zealand sharemarket recovered from an early morning sell-off, closing more than half a per cent down, over uncertainty about the impact of the new Covid variant called Omicron. But market leader Fisher and Paykel Healthcare shone.

The S&P/NZX 50 Index fell sharply in the first half-hour of trading, reaching 12,444.38 points, or 1.2 per cent down. The index finished at 12,531.66, down 97.23 points or 0.77 per cent – its lowest level since late June.

Following the deep dive on Wall Street at the weekend, the local index followed the path of the Australian S&P/ASX 200 Index, which rebounded strongly to be down 0.27 per cent to 7,260 points at 5.45pm (NZ time).

Dan Stratful, investment adviser with Forsyth Barr, said the arrival of the new Covid variant had thrown a spanner in the works for the economic outlook.

"Whether it plays out and dampens economic growth, who knows? Today's falls in New Zealand and Australia were initially a knee-jerk reaction to the big sell-off on Wall Street. It should be an interesting week ahead," Stratful said.

There was some relief, with the Government confirming the country will move into the new traffic light system on Friday with more freedoms, and a new transition payment will be made to businesses in Auckland and Waikato under the Resurgence Support Payment criteria.

Fisher and Paykel Healthcare was up 40c to $33, after reaching an intraday high of $33.48. Stratful said Fisher and Paykel is seen as a big defensive stock benefitting from the weaker NZ dollar and having a solid half-year result last week.

The Kiwi has fallen from US69.86c against the US dollar a week ago to US68.31c (at 5.45pm NZ time), while the New Zealand 10 Year Government bond yield has gone from 2.6 per cent to 2.44 per cent in a week.

The main board was a sea of red, particularly among travel and leisure stocks, with 119 decliners and 31 gainers - 33.29 million shares worth $110.98 million changed hands.

Air New Zealand fell 5c or 3.17 per cent to $1.525; Tourism Holdings was down 5c to $2.80; Serko dropped 38c or 5.63 per cent to $6.37; Vista Group lost 6c or 2.56 per cent to $2.28; and SkyCity Entertainment declined 7c or 2.26 per cent to $3.02.

SkyCity Entertainment told the market it has secured a debt covenant waiver from its banking syndicate, as well obtaining additional funding facilities of $50m.

The fall in wholesale interest rates is affecting bank stocks, with ANZ Banking Group down 48c to $27.92; Westpac Banking Corporation declining 40c or 1.79 per cent to $21.92; and Heartland Group Holdings decreasing 7c or 3.08 per cent to $2.20.

Property company Stride was down 2.6c to $2.05; Property for Industry fell 7c or 3.08 per cent to $2.72; Investore declined 4c or 2.16 per cent to $1.81; and Argosy decreased 3c or 2.08 per cent to $1.415.

Other decliners were Mainfreight, down $1.50 to $88.50; Summerset Group Holdings, shedding 14c to $12.80; Fletcher Building, losing 10c to $6.70; Port of Tauranga, falling 16c or 2.36 per cent to $6.62; and a2 Milk, shedding 8c to $6.20.

The leading energy stocks were subdued, with Contact down 8c to $7.82; Meridian declining 4c to $4.49; and Mercury decreasing 7c to $585.

Sky Network Television declined 4c or 2.26 per cent to $1.73; The Warehouse Group was down 11c or 2.82 per cent to $3.79; Harmoney decreased 8c or 4.08 per cent to $1.88; AFT Pharmaceuticals fell 13c or 2.8 per cent to $4.52; Gentrack shed 9c or 4.76 per cent to $1.80; and Allied Farmers was down 6c or 6.52 per cent to 86c.

NZ Automotive Investments, which owns 2 Cheap Cars and NZ Motor Finance, gained 1c to 87c after reporting half-year revenue of $31.23m, up 2 per cent, and net profit of $1.4m, down 25 per cent. It is paying an interim dividend of 16c on December 23.

Radius Residential was down 2.5c or 4.9 per cent to 48c after reporting a 35.4 per cent fall in net profit to $1.33m on revenue of $66.27m, up 7.9 per cent, for the six months ending September. It is paying an interim dividend of 0.7c a share on December 23. Sales volume was 10.6 per cent ahead of the previous corresponding period.

Merchant services firm Smartpay Holdings gained 0.005c to 74c after increasing its half-year revenue 44.8 per cent to $21.03m on the back of strong Australian growth, with the total transaction value up 103 per cent year on year to $1.1 billion.

TruScreen, which has developed a cervical screening device, rose 0.006c or 7.59 per cent to 8.5c after increasing half-year revenue 43 per cent to $1.41m and narrowing its net loss to $1.25m.