Market close: Slowdown in China's economic growth rattles NZ sharemarket

Photo / NZME

A sharp slowdown in China's economic growth and nervousness in its housing market rattled markets, with New Zealand's falling more than half a per cent.

The S&P/NZX 50 Index fell abruptly at lunchtime and finished down 65.36 points or 0.58 per cent to 11,122.61 after reaching a morning high of 11,203.16. The index was down just 0.4 per cent for the week.

There were 50 gainers and 84 decliners on the main board but trading, during the school holidays, was again thin with 12.64 million shares worth $39.83m changing hands.

China's gross domestic product (GDP) expanded only 0.4 per cent in the second quarter to June against analysts' forecasts of 1.2 per cent, and was down from growth of 4.8 per cent in the first quarter this year.

It was the slowest pace of growth since the Covid-19 outbreak more than two years ago, and analysts are now saying China will miss its goal of increasing GDP by 5.5 per cent for the full year. This adds another blow to a global economy hit by recession fears.

China's strict zero-Covid policy has jolted industrial production and consumer spending, as well as the property market.

Shane Solly, portfolio manager with Harbour Asset Management, said there was a lot of investor concern about bank liquidity in China.

"People who have committed to buying apartments in 52 residential developments across 22 cities have gone on a mortgage strike and are not making payments because they have lost confidence that their homes will be built," he said.

"That's caused a shock in commodity markets. But the local market has cycled along okay this week, with our defensive stocks standing out."

The S&P/ASX 200 Index was down 0.8 per cent to 6597.7 points at 5.45pm NZ time, and the Hong Kong Hang Seng Index had fallen 1.66 per cent to 20,406.74,

At home, there were few major moves among the leading stock on the light volume.

Fisher & Paykel Healthcare declined 40c or 1.9 per cent to $20.60; Fletcher Building was down 7c to $5.07; Ryman Healthcare decreased 26c or 2.88 per cent; Summerset Group Holdings also shed 26c or 2.54 per cent to $9.99; and Skellerup Holdings gave up 17c or 3.26 per cent to $5.05.

Transtasman operators ANZ Banking Group declined 33c to $23.95, and fuel supplier Ampol was down 64c or 1.75 per cent to $36.

Freightways recovered 21c or 2.17 per cent to $9.90; Port of Tauranga was up 14c or 2.13 per cent to $6.70; and Comvita gained 7c or 2.17 per cent to $3.30.

Mercury Energy was down 14.5c or 2.43 per cent to $5.815, and Meridian declined 4c to $4.82.

In its June operating report, Meridian said hydro storage increased from 85 per cent to 94 per cent of historical average; retail sales volumes were up 6.5 per cent compared with the same month last year; and generation improved by 5.1 per cent at a 29.8 per cent lower average.

Contact, up 3c to $7.48, and Meridian gained an uplift in the iShares Global Clean Energy exchange traded fund, with $4.23m and $18.72m worth of their shares being traded late in the day.

Manawa Energy said after falls in April and May, inflows recovered to be 29 per cent above average, and generation volumes for the first quarter of 2023 financial year were 419GWH or 3 per cent lower than the previous corresponding period. Manawa's share price was up 5c to $6.10.

Michael Hill International rose 5c or 4.2 per cent to $1.24 after reporting its 12th quarter of store sales growth since 2019. All store sales increased 17 per cent in the latest June quarter compared with the same time last year, and full-year sales were up 7.3 per cent despite 10,000 lost trading days in the 2021 and 2022 financial years because of the Covid pandemic.

Michael Hill expects full-year operating earnings (ebit) of $60m-$63m compared with $56.6m last year, record digital sales of more than $40m, and increased margins of 150-350 basis points.

Other gainers were Turners Automotive up 7c or 1.89 per cent to $3.77; CDL Investments collecting 3c or 3.75 per cent to 83c; and Accordant Group increasing 5c or 2.86 per cent to $1.80.

Other decliners were AFT Pharmaceuticals down 9c or 2.35 per cent to $3.74; Scott Technology decreasing 7c or 2.44 per cent to $2.80; T&G Global shedding 8c or 2.88 per cent to $2.70; Ventia Services Group losing 6c or 2.14 per cent to $2.74; and Scales Corporation down 10c or 2.33 per cent to $4.20.

Trade Window Holdings, down 2c or 2.35 per cent to 83c, has confirmed the purchase of Rfider Limited, an Auckland software company whose mobile interface will capture more supply chain data for Trade Window's transport and logistics platform.