NZ stocks follow sharp falls offshore - Market close

Restaurant Brands gained 12c or 5.33 per cent to $3.52 after reporting total sales increased 7.9 per cent to $333m for the three months ending March compared with the previous corresponding period. Photo / Luke Kirkness

The New Zealand sharemarket followed sharp falls offshore on fresh investor concerns that the sticky inflation will delay interest rate cuts.

The S&P/NZX 50 Index fell at the opening and then maintained a steady momentum to close at 11,867.58, down 89.92 points or 0.75 per cent.

There were 98 decliners and 34 gainers on the main board with 27.67 million shares worth $87.9 million changing hands.

Matt Goodson, managing director of Salt Funds Management, said the markets are faced with the ongoing theme of inflationary pressures being slow to subside and interest rates staying higher for longer, impacting the value of equities.

He said the US Federal Reserve was meeting overnight and there were concerns that a rate cut there might not happen this year.

The US employment cost index, a measure of wages and benefits, increased 1.2 per cent in the March quarter, above economists’ estimate of 1 per cent.

The Dow Jones Industrial Average declined 1.49 per cent to 37,815.92 points and is down 5 per cent in April – its worst monthly performance since September 2022.

The S&P 500 shed 1.57 per cent to 5035.69 points (down 4.2 per cent in April) and the Nasdaq Composite slumped 2.04 per cent to 15,657.82 (down 4.4 per cent).

Across the Tasman, the S&P/ASX 200 Index had fallen 1.1 per cent to 7579.5 points at 6pm NZ time.

At home, the first quarter labour market data was weaker than expected, with unemployment rising to a three-year high of 4.3 per cent, up from 4 per cent in the previous quarter and ahead of the 4.2 per cent forecast.

Goodson said unemployment could have been higher if the participation rate had not fallen 40 basis points. The labour cost index increased 0.8 per cent in the quarter and 3.8 per cent year-on-year.

Private sector wages were up 3.8 per cent and public 5.5 per cent with average hourly earnings increasing 4.8 per cent year-on-year – the peak was 8.6 per cent in 2022.

Goodson said they are still big numbers but wage inflation is starting to come back which is critical for the Reserve Bank. “The Business Outlook survey showed depressed economic conditions and people are pretty grumpy out there. We see a rate cut by the Reserve Bank in November.”

Fisher and Paykel Healthcare eased 26c to $28.21; a2 Milk was down 12c or 1.79 per cent to $6.57; Fletcher Building declined 9c or 2.36 per cent to $3.72; Skellerup decreased 8c or 1.78 per cent to $4.42; and Serko gave up half of its gain the day before, falling 29c or 7.8 per cent to $3.43.

Goodson said Serko had a relief rally but investors took a second look at the agreement with Booking.com and found a sharp price abatement (to Serko) when bookings reached a certain threshold.

Summerset shed 27c or 2.43 per cent to $10.83; Comvita was down 6c or 2.91 per cent to $2; Manawa Energy declined 12c or 2.75 per cent to $4.24; Delegat Group decreased 20c or 3.03 per cent to $6.40; Scott Technology eased 6c or 2.39 per cent to $2.45; and Sky TV was down 7c or 2.41 per cent to $2.84.

Retailers KMD Brands declined 3c or 5.56 per cent to 51c; Michael Hill also shed 3c or 4.05 per cent to 71c, and Hallenstein Glasson was down 8c to $5.96.

The property sector was weaker. Argosy declined 3c or 2.67 per cent to $1.095; Investore also decreased 3c or 2.65 per cent to $1.10; Goodman Trust fell 7c or 3.07 per cent to $2.21; and Vital Healthcare Trust eased 5.5c or 2.52 per cent to $2.13.

Restaurant Brands, gaining 12c or 5.33 per cent to $3.52, reported total sales increased 7.9 per cent to $333m for the three months ending March compared with the previous corresponding period.

New Zealand sales were up 15.2 per cent to $149m, Australia 1.4 per cent to A$68.9m ($73.9m), Hawaii 5.6 per cent to US$41.1m ($67.1m), and California was down 4.2 per cent to US$26.3m.

Steel & Tube increased 3c or 2.94 per cent to $1.05 after announcing the $700,000 purchase of 20 owned and leased trucks and eight owned trailers from Roadex Logistics, which transports steel. Steel & Tube’s staff will grow with 20 Roadex drivers.

Sanford increased 9c or 2.25 per cent to $4.09 after telling the market it has appointed one of its directors and former Skellerup boss David Mair as the new chief executive.

Other gainers were Freightways collecting 10c to $8.50; Allied Farmers up 4c or 5.33 per cent to 79c; NZ Oil & Gas increasing 3.5c or 8.14 per cent to 46.5c; and Ventia Services adding 6c to $4.05.