Market close: US Fed's message spooks markets

US Federal Reserve chairman Jerome Powell. Photo / AP

Global marketer a2 Milk surprised the New Zealand sharemarket with a strong financial result. But it wasn't enough to rescue the falling market, weighed down by a sharp decline on Wall Street at the weekend.

The S&P/NZX 50 Index was down 101.34 points or 0.87 per cent to a day's low 11,506.94 on light volume of 28.17 million share transactions worth $95.58 million. There were 122 decliners and 37 gainers over the whole market.

Jeremy Sullivan, investment adviser with Hindin Hamilton Greene, said New Zealand has had a robust earnings season, including a2 Milk, but this has been overshadowed by the international macro-economic headwinds, including slowing economies.

United States Federal Reserve chair Jerome Powell said after the Jackson Hole Symposium that the central bank will continue to raise interest rates to fight inflation. This will mean some pain for households and business but the alternative is far greater pain.

Sullivan said Powell's message spooked the markets and flowed through to Australia and New Zealand.

The Dow Jones Industrial Average fell 3.03 per cent to 32,283.4 points, S&P 500 was down 3.37 per cent to 4057.66, and Nasdaq Composite tumbled 3.94 per cent to 12,141.71 points. US futures pointed to another fall overnight.

Across the Tasman, the S&P/ASX 200 Index was down 2 per cent to 6962.3 points at 5.45pm.

At home, a2 Milk beat market expectation with its annual result and surged 53c or 9.69 per cent to $6. Sister company Synlait gained 2c to $3.36.

The a2 Milk Company achieved record market shares for China label infant milk formulas in mother and baby stores and domestic online, and also for milk in Australia and United States.

The company reported a 52 per cent increase in net profit to $122.62m on revenue of $1.44 billion, up 19.8 per cent. With net cash of $816.5m, the company is making a $150m capital return to shareholders in a 12-month share buy-back programme.

Sullivan said a2 Milk's logistics issues have been largely resolved and it was encouraging how the company has mitigated the challenging Chinese market. "They have set a revenue target of $2b and still see plenty of room to grow."

Retail jeweller Michael Hill International produced a solid annual result, rising 5c or 4.31 per cent to $1.21 after reporting a 13.9 per cent lift in net profit to A$46.7m ($52.36m) on revenue of A$595.2m, up 7 per cent. New Zealand store sales increased 8.9 per cent, and Michael Hill is paying a final dividend of A4c a share on September 23.

Fellow retailers Briscoe Group was down 12c or 2.25 per cent to $5.22; Hallenstein Glasson declined 16c or 2.9 per cent to $5.35; and the Warehouse Group decreased 5c to $3.26.

Marsden Maritime Holdings rose 32c or 5.82 per cent to $5.82 after Port of Tauranga chief executive Leonard Sampson said Northport should expand its container operation to take the pressure off Ports of Auckland. Port of Tauranga which has a 50 per cent share of Northport near Whangarei, was down 9c to $6.81.

Fisher and Paykel Healthcare declined 59c or 2.92 per cent to $19.61; Auckland International Airport was down 10c to $7.58; Freightways decreased 34c or 3.16 per cent to $10.41; Fletcher Building shed 13c or 2.29 per cent to $5.54; and Mainfreight was down $1 to $75.50.

Ryman Healthcare declined 24c or 2.61 per cent to $8.95; Summerset Group Holdings shed 26c or 2.36 per cent to $10.74; Air New Zealand decreased 1c to 65.5c; and Tourism Holdings was down 8c or 2.96 per cent to $2.62.

Fonterra Shareholders' Fund fell 11c or 3.56 per cent to $2.98 after the co-operative downgraded its forecast milk price from $9.50 to $9.25 per kgMS.

Heartland Group Holdings was down 7c or 3.76 per cent to $1.79; Sky Network Television declined 12c or 4.67 per cent to $2.45; and Just Life Group fell 6c or 10.71 per cent to 50c.

Fast food operator Restaurant Brands slumped 41c or 4.8 per cent to $8.14 after reporting a 56 per cent fall in net profit to $15.3m on revenue of $584.9m, up 8 per cent, for the 12 months ending June. Increased input costs affected Restaurant Brands' margins.

Cinema software management firm Vista Group declined 3c to $1.85 after reporting a net loss of $18m on revenue of $62.4m, up 39 per cent, for the six months ending June. Vista has upgraded its full-year revenue guidance to $123m-$128m, from $118m-$123m, as box office sales improve.

Transtasman fuel supplier Ampol fell $1.36 or 3.42 per cent to $38.44 after telling the market it is selling 49 per cent worth of 51 Z Energy service stations to Australian-based Charter Hall Retail REIT for $126m.

Among the few gainers, PGG Wrightson increased 18c or 3.99 per cent to $4.69; Serko was up 8c or 2.29 per cent to $3.58; and Ventia Services Group improved 7c or 2.27 per cent to $3.16.