US and European equity markets were down overnight after the price of Brent crude oil fell below US$20 per barrel — a two-decade low. Prices for other commodities, such as milk powder, were also weaker. Asian markets were mixed.
The local share market followed the negative reaction to the oil price plunge, led lower by Refining NZ, which dropped 9.8 per cent to 83 cents.
Solly said volatile spot oil prices were challenging. Sometimes the refinery could benefit and sometimes it could be hurt. The uncertainty while the company was already going through upheaval was enough to bring some investors to sell, he said.
"It is a really unusual circumstance and investors are not sure how to deal with it," he said.
Z Energy, which is a cornerstone shareholder of Refining NZ, fell 4.7 per cent to $3.06. Demand for fuel is likely to remain depressed throughout the different Covid–19 alert levels.
"There will be some pick up in transport usage related to going into level 3, but the higher margin parts of the business are under pressure," Solly said.
This pickup in activity will help the company, but low oil prices are unlikely to help margins as fuel retailers are under scrutiny to pass savings on to consumers.
A2 Milk rose 1.5 per cent to $19.75 after saying profit margin had a temporary boost as consumers stocked up, the kiwi dollar slid and overhead costs fell. Revenue was above expectations, particularly for infant nutrition products sold in China and Australia, but the company warned those levels were unlikely to continue.
Meanwhile, economists have warned that the sharp fall in global growth coupled with a spike in unemployment could see demand for dairy products go down.
Fonterra Shareholders' Fund units declined 1.3 per cent to $3.69 and Synlait Milk fell 3.1 per cent to $6.94
Spark New Zealand posted the day's biggest gain, up 4.7 per cent at $4.48. It said it still expects small earnings growth and plans to keep paying dividends, despite the national lockdown denting its high-margin mobile roaming revenue that accounts for 5 per cent of all sales. While broadband use and voice calling increased, most of Spark's customers are on unlimited data and minute plans, meaning it doesn't reap any upside from that increase.
Chorus fell 1.1 per cent to $6.96.
Stock exchange operator NZX declined 0.8 per cent to $1.27 after it said it hired accounting firm EY to review technical problems over the past six trading days. It is also reviewing a range of hardware upgrades to increase processing throughput.
Air New Zealand fell 6.3 per cent to $1.275 after it said it would rejig its domestic network from next Tuesday when the country eases the lockdown restrictions to keep freight moving as personal travel remains very restricted.
Solly said the collapse of Virgin Australia was likely weighing on the airline's share price today. The Australian airline, which Air New Zealand was a shareholder in until 2016, entered voluntary administration yesterday.
SkyCity Entertainment Group fell 3.9 per cent to $2.24, while Fletcher Building declined 4.8 per cent to $3.61. The two companies welcomed a report by Fire and Emergency New Zealand that found last October's fire at the under-construction SkyCity convention centre and hotel was an accident.
Kathmandu Holdings completed the retail entitlement component of its capital raising, bringing another $53m onto the balance sheet. It's share price fell 2.5 per cent to 77 cents today.
Just over half of all eligible retail shareholders took up Kathmandu's offer to acquire new shares at 50 cents, with those shareholders applying for an additional $17m of shares. That brought the effective take-up rate to approximately 82 per cent.
