Market close: Rise in bond yields rattles NZ shares

Fisher and Paykel Healthcare was one of the hardest hit stocks today, falling 82c or 2.55 per cent to $31.30. Photo / Supplied

A further rise in bond yields rattled the New Zealand sharemarket, and Fisher and Paykel Healthcare was one of the hardest hit as investors switched out of growth stocks.

The S&P/NZX 50 Index had a sharp fall in the afternoon and closed at 13,174.38, down 53.32 points or 0.4 per cent, after reaching a morning high of 13,268.15.

There were 62 gainers and 73 decliners across the whole market, with 51 million shares worth $187.42 million changing hands.

The market may have taken some direction from the Australian S&P/ASX 200 Index which had fallen 1.31 per cent to 7287.6 points at 5.45pm NZ time.

Shane Solly, portfolio manager with Harbour Asset Management, said investors were spooked by comments from two United States Federal Reserve governors that the bond-buying programme to stimulate the economy may ease faster than expected.

The US 10 Year Treasury Note yield reached its highest level since June, rising 0.023 to 1.507 per cent. The New Zealand 10 Year Government Bond yield was up 0.027 to 1.966 per cent.

Solly said investors once again worried about interest rates going up and rotated out of growth into more cyclical stocks. Healthcare and technology were the weaker sectors globally.

"Bond yields going up, high energy and shipping costs coming through, and central banks are talking about tapering their economic stimulus – it's a conundrum for markets and investors are being very cautious."

Market leader Fisher and Paykel Healthcare fell 82c or 2.55 per cent to $31.30 on trade worth $12.28m. Another healthcare stock Pacific Edge was down 5c or 3.21 per cent to $1.51.

Solly said people are focusing on the increasing vaccination rates and whether this will reduce demand for Fisher and Paykel's respiratory devices. "Maybe the demand for their devices has been stronger for longer than people thought."

Milk companies a2 Milk and Synlait continued to rebound, rising 20c or 3.3 per cent to $6.26 and 9c or 2.53 per cent to $3.65 respectively.

Solly said the market is taking comfort from Synlait's comments that the degree of volume decline from a2 was less than expected, and Synlait would make a robust profit in the present financial year.

Scales Corporation climbed 22c or 4.01 per cent to $5.70 as it continues to attract strong demand for its apples and pet food.

Tauranga-based Trustpower confirmed that the Commerce Commission has cleared the way for Mercury to buy its retail business of supplying electricity, gas, fixed and wireless broadband, and mobile phone services to 234,000 customers around the country. Trustpower slipped 1c to $7.44, and Mercury was unchanged at $6.39. Contact gained 4c to $8.45.

Ebos Group increased 20c to $35.40; The Warehouse Group rose 14c or 3.55 per cent to $4.08; Kathmandu Holdings gained 3c or 1.92 per cent to $1.59; AMP was up 5c or 4.9 per cent to $1.07; and NZME picked up 3c or 3.16 per cent to 98c.

Napier Port rose 8c or 2.54 per cent $3.23 to $3.20; South Port New Zealand increased 5c to $9.20; and Move Logistics collected 3c or 2.01 per cent to $1.59.

Air New Zealand was up 2.5c to $1.675 and Tourism Holdings rose 7c or 2.92 per cent to $2.47 – two stocks that will benefit from the re-opening of the border.

Mainfreight fell $2.05 or 2.15 per cent to $93.47; Fletcher Building continued to slide, down 10c to $7.10; SkyCity Entertainment declined 4c to $3.19; Scott Technology decreased 10c or 3.39 per cent to $2.85; and Plexure Group shed 6c or 8.96 per cent to 61c.

Rua Bioscience rose 2.5c or 6.41 per cent to 41.5c after telling the market it has received its Good Manufacturing Practice certification from Medsafe to manufacturer its first medicinal cannabis product, a cannabinoid oil. Fellow medicinal cannabis firm Cannasouth gained 2.5c or 6.58 per cent to 40.5c.

New Zealand Oil & Gas will complete its buy-in to the Mereenie joint venture in North Territory on October 1 after two wells were drilled and completed for production. NZOG's share price slipped 1c or 2.27 per cent to 43c.