Market Close: US Fed plan fails to move NZ sharemarket

Fisher and Paykel Healthcare dragged the market down, falling 59c or 2.39 per cent to $24.05

The move by the United States Federal Reserve to take the Covid economic stimulus out of its balance sheet sent sharemarkets tumbling, but by the end of the day New Zealand's bucked the trend.

The S&P/NZX 50 Index recovered late in the day, particularly in the last half hour matching session, closing flat at 12,075.91 points. The index was down just 3.39 points or 0.03 per cent after reaching a lunchtime low of 12,000.13.

There were 82 decliners and 5 gainers over the whole market on healthy volume of 56 million share transactions worth $188.07 million.

The Federal Reserve minutes from its March policy meeting showed an agreement to reduce the balance sheet by US$95 billion (NZ$137.8b) a month, made up of US$60b in Treasury Notes and US$35b in mortgage-backed securities. The monetary policy tightening could start next month.

Jeremy Sullivan, investment advisor with Hamilton Hindin Greene, said the Fed was looking to reduce all of the economic stimulus it put into the market. "It's quite ambitious – the largest reduction in its history. Two and a half months of the reduction is equal to the whole New Zealand economy."

He said the move impacted the Australian technology sector and "I guess you can tip Fisher and Paykel Healthcare and Pushpay Holdings into that."

The major US indices retreated for the second day running. The Dow Jones Industrial Average was down 0.42 per cent to 34,496.51; S&P 500 declined 0.97 per cent to 4481.15 points; and Nasdaq Composite fell 2.22 per cent to 13,888.82, having fallen nearly 4.5 per cent in two days.

The S&P/ASX 200 Index was down 0.63 per cent to 7443.1 points at 6pm NZ Time. The oil price has fallen to just over US$97 a barrel.

Fisher and Paykel Healthcare dragged the market down, falling 59c or 2.39 per cent to $24.05 on trade worth $20.88m. Pushpay Holdings, which has most of its business in the US, was down 6c or 5.17 per cent to $1.10.

EBOS Group hit a new high after rising $1.59 or 3.85 per cent to $42.88. Spark gained 9.5c or 2.02 per cent to $4.79; Freightways was up 19c to $12.59; and Serko increased 10c or 2.02 per cent to $5.06.

Infratil increased 10c to $8.28; Vulcan Steel collected 12c to $9.86; The Colonial Motor Company was up 11c to $10.51; and hospitality group Savor picked up 2c or 4.65 per cent to 45c.

Air New Zealand ordinary shares were down 7c or 8.14 per cent to 79c, and the rights – with 7.36m worth $3.67m being traded – were down 1.1c or 2.12 per cent to 50.9c.

Sullivan said there was a 10 per cent arbitrage, which is unusual, between the Air New Zealand shares and rights but that gap had closed. "If there were a lot of institutions investing in the airline, that arbitrage would never be there. But those who bought over the past two days were happy, getting 10 per cent free money, and the NZX put out communication about mispricing by investors."

Amongst the energy stocks, Meridian had another volatile day, down 13c or 2.56 per cent to $4.95; Genesis declined 7c or 2.42 per cent to $2.825; Mercury was up 12c or 1.96 per cent to $6.24; and Trustpower gained 5c to $7.30.

Mainfreight declined 70c to $80.80; Fletcher Building was down 7c to $6.18; Sanford decreased 11c or 2.3 per cent to $4.67; and DGL Group shed 8c or 2.25 per cent to $3.47.

Winton Land decreased 10c or 2.94 per cent to $3.30; Green Cross Health was down 7c or 4.83 per cent to $1.38; and EROAD fell 18c or 4.08 per cent to $4.23.

Amongst the retailers, Hallenstein Glasson fell 38c or 5.71 per cent to $6.27, and The Warehouse Group was down 14c or 4.36 per cent to $3.07. My Food Bag went under the 90c mark, falling 5c or 5.32 per cent to 89c.

Goodman Property Trust, up 3.5c to $2.395, has raised $150m, including $50m in over-subscriptions, for its five-year green bond paying an interest rate of 4.74 per cent a year. Precinct Properties increased 3.5c or 2.28 per cent to $1.57.

Scott Technology, which has automation design and build contracts in Europe, United States, China, Australia and New Zealand, was up 1c to $3.26 after reporting a solid half year result.

Net profit increased 0.5 per cent to $4.74m on revenue of $118.4m, up 13 per cent, for the six months February. Operating earnings (ebitda) were up 19 per cent to $11.7m, and Scott is paying an interim dividend of 4c a share on May 11.

Third Age Health Services is buying Devonport Family Medicine and its share price was unchanged at $2.75.