NZX chalks up fifth day of losses in a row - Market close

Michael Hill was down 1c to 95c after providing a warning of a drop in earnings because of challenging trading conditions. Photo / NZME

The New Zealand sharemarket chalked up its fifth down day in a row – with retail jeweller Michael Hill providing a warning of a drop in earnings because of challenging trading conditions.

The S&P/NZX 50 Index slipped in the afternoon and closed at 11,666.07, down 21.11 points or 0.18 per cent after reaching an intraday high of 11,737.56.

The index fell 1.6 per cent for the week. There were 73 gainers and 51 decliners on the main board with 34.2 million shares worth $101.2 million changing hands.

David McConnochie, investment adviser with Forsyth Barr, said the local market has reflected the mixed performances overseas.

He said interest rates were still holding investors’ attention – wholesale swap rates have crept up – and there is a stand-off between the markets and central banks over when they will start cutting official cash rates.

The United States and Australian markets have also had a run of down days but suddenly picked up. On Wall Street the technology stocks reignited and Dow Jones Industrial Average was up 0.54 per cent to 37,468.61 points; S&P 500 increased 0.88 per cent to 4780.94; and Nasdaq Composite rose 1.35 per cent to 15,055.65.

Across the Tasman, the S&P/ASX 200 Index had risen 0.99 per cent to 7419.2 points at 5.45pm NZ time after five successive down days.

At home, Michael Hill was down 1c to 95c after expecting first-half earnings before interest and tax to be $30m-$33m compared with $54.4m in the previous corresponding period, and gross margin in the range 61-62 per cent, down from 65.2 per cent.

New Zealand sales for the six months ending declined 10.3 per cent to $65.4m, while Australia increased 10.2 per cent to A$202.4m ($218.22m), boosted by the new Bevilles business. The Canadian stores contributed C$88.3m ($107.23m), up 0.6 per cent, and total group sales were A$362.8m, up 4.1 per cent.

The retail jeweller told the market that while the first half was definitely a challenging period with sales for the core Michael Hill brand down, “we are encouraged by our performance against the broader jewellery sector”.

Higher input costs for gold and diamonds and more aggressive competitor behaviour have put trading margins under pressure, Michael Hill said.

Ryman Healthcare was down 13c or 2.22 per cent to $5.72; Summerset gave up 16c to $10.45; Port of Tauranga declined 10c or 1.82 per cent to $5.40; Tourism Holdings decreased 10c or 2.7 per cent to $3.60; Comvita shed 5c or 2.08 per cent to $2.35; and Restaurant Brands was down 7c or 1.79 per cent to $3.85.

In the interest rate-sensitive energy sector, Meridian was down 9c to $5.46; Contact declined 8c to $7.96; Mercury shed 11c to $6.41; and Manawa was up 5c to $4.35.

New Zealand Rural Land Company rose 6c or7.06 per cent to 91c after announcing it has sold 25 per cent of its portfolio to Australian investment manager Roc Partners for $44.2m. Some of the money will be used to repay the $11.8m owing on a convertible note.

NZ Rural’s owner Allied Farmers increased 5c or 6.25 per cent to 85c. Private Land and Property Fund increased 5.2c or 3.7 per cent to $1.459.

Fletcher Building increased 10c or 2.15 per cent to $4.75; SkyCity was up 5c or 2.75 per cent to $1.87; Mainfreight collected 44c to $71.35; Ventia Services gained 7c or 2.1 per cent to match its high of $3.40; Vulcan Steel added 19c or 2.43 per cent to $8; and Hallenstein Glasson was up 11c or 2 per cent to $5.62.

Global marketer a2 Milk gained a further 13c or 2.88 per cent to $4.64 on the back of a better-than-expected Chinese birth rate for last year.

Synlait Milk, unchanged at 87c, has increased its forecast milk price for the 2023/24 season to $7.50 per kg milk solids, up from $7.25, because of improving dairy commodity prices.

Burger Fuel was up 2c or 7.14 per cent to 30c. Burger Fuel earlier told the market a shareholder has filed a notice of opposition in the High Court to its plan of returning capital to shareholders.

Other gainers were NZ Oil & Gas adding 2c or 5.33 per cent to 39.5c; ikeGPS up 3c or 6 per cent to 53c; and Chatham Rock Phosphate increasing 1c or 9.09 per cent to 12c.