NZ shares recover in modest decline as cooler heads prevail

New Zealand shares bounced back from a sharp sell-off in early trading. Photo / File

New Zealand shares bounced back from a sharp sell-off in early trading as investors regained some confidence that governments are taking steps to deal with the covid-19 outbreak.

The S&P/NZX 50 Index fell as much as 4.9 per cent, but ended the day down 1.8 per cent, or 194.34 points, at 10,897.47. Within the index, 36 stocks fell, 11 rose, and three were unchanged. Turnover was heavy at $231.7 million.

Traders were braced for the worst after Wall Street's 15-minute circuit breakers halted trading when US stocks fell too steeply. Investors were already on edge as they weigh up the threat to global growth from the covid-19 outbreak, but that was compounded by the stand-off between Russia and Saudi Arabia.

Matt Goodson, managing director at Salt Funds Management, said it had been an "exceptionally whippy" session.

"Although most people said retail investors were being relatively staunch, it was fairly clear from initial moves in our market that there was a bit of panic first thing this morning," he said.

"We've been relatively well-behaved compared to overseas markets, so that's certainly worth remembering."

The local recovery came as stock markets across Asia followed US futures and oil prices higher after US President Donald Trump said he'd seek a payroll tax cut and ensure help is available to hourly workers in response to the virus outbreak.

Goodson said the preliminary reading on the ANZ business confidence survey showed sharp declines in businesses' expectations for their own activity and profitability, which was concerning.

"Hopefully, we'll see this government take some action that's helpful next week," he said.

Property for Industry led the local market lower, down 6.2 per cent at $2.26, while Restaurant Brands New Zealand fell 5.8 per cent to $10.35. Arvida Group declined 5.4 per cent to $1.57.

Fisher & Paykel Healthcare, which has been touted as a potential beneficiary of the outbreak, dropped 4.5 per cent to $25.57.

Tourism Holdings has been among the hardest hit stocks as investors assess the impact of the outbreak on the tourism sector. It posted the day's biggest gain, up 2 per cent at $2.55.

Mainfreight rose 1.4 per cent to $36.50 and Genesis Energy also increased 1.4 per cent to $2.94.

Goodman Property Trust was the most traded stock on a volume of 5.7 million units, well up on its one million average the past three months. It fell 4 per cent to $2.31.

Air New Zealand, which has been scaling back capacity in the face of dwindling demand, fell 2.3 per cent to $1.905, its lowest close in four years. Some 4 million shares changed hands, up on its 1.1 million average.

Outside the benchmark index, AFT Pharmaceuticals rose 2.8 per cent to $3.70 after the maker of maxigesic painkillers said the virus had boosted demand and that annual sales would be at the upper end of guidance.

Asset Plus fell 8.6 per cent to 53 cents. The property investor said it would raise $100m in a 1.235-for-1 pro-rata rights offer at 50 cents a share to help pay for new developments to transform its asset portfolio. Its manager, Augusta Capital, committed to take up its stake, with the balance underwritten by Jarden.

Augusta shares fell 3 per cent to $1.95.