New Zealand shares fell today, led lower by export stocks as coronavirus continued to propel investor decision making.
The S&P/NZX 50 Index declined 38.67 points, or 0.3 per cent, to 11,511.49. Within the index, 25 stocks fell, 19 rose and six were unchanged. Turnover was $158.9 million.
Asian markets fared better today, recouping a fraction of yesterday's plunge in Chinese equities after the reopening of markets on China's mainland.
The Shanghai Composite Index was up 0.2 per cent in afternoon trading, although still down roughly 7 per cent from before the lunar holiday. The Hang Seng rose 1.2 per cent and the S&P/ASX 200 Index rose 0.3 per cent.
Overnight, European and US investors were cheered by better manufacturing data, although the coronavirus remained front of mind. Wall Street's S&P 500 Index rose 0.9 per cent, potentially sparking Asia's recovery.
Grant Davies, an investment adviser at Hamilton Hindin Greene, said concerns around coronavirus were still dictating market sentiment and would continue to do so for the foreseeable future.
"It's another day dominated by coronavirus news. In terms of stock-specific news it is few and far between, but sometimes you don't need that for the market to move around," he said.
"We are in a period of increased volatility, there are as many stocks moving 2 per cent as there are not moving at all."
Stocks exposed to international trade were under pressure, as Skellerup Holdings fell 3.8 per cent to $2.31, Port of Tauranga decreased 3.2 per cent to $7.16, Synlait Milk dropped 2.4 per cent to $8.31, Fonterra Shareholders' Fund Units fell 1 per cent to $3.91 and A2 Milk decreased 0.5 per cent to $14.58 on a volume of 646,000 shares.
Australian research firm Select Equities today downgraded its recommendation on A2 Milk from 'hold' to 'sell', saying distribution channels were likely to be impacted by the coronavirus outbreak.
Select Equities lowered its revenue forecast for 2020 fiscal year by 3.3 per cent and 2021 by 3.7 per cent.
"A2 is a stock that does require plain sailing and growth in China, so any issues that interfere with that growth would be enough to give you pause for thought," Davies said.
The country's busiest airport experienced flight disruptions and delays after the New Zealand government announced on Sunday it was restricting entry into the country for foreign nationals arriving from mainland China.
Auckland International Airport fell 2.4 per cent to $8.20 on a volume of 2 million shares, but other travel-related stocks fared better. Tourism Holdings held at $2.80 and Air New Zealand rose 0.2 per cent to $2.745 on a volume of 2.4 million shares.
Investment bank Macquarie was reportedly hosting a conference call on the Rio Tinto smelter for institutional investors, today. The viability of Tiwai Point is an important factor for investors in New Zealand's electricity companies.
Meridian Energy fell 3.2 per cent to $5.15 on a volume of 1.6 million shares, Contact Energy fell 1.4 per cent to $7.16 on a volume of 806,000 shares.
"Any level of uncertainty is usually not a good thing for a stock like Meridian, which is held by a lot of investors because of its relatively predictable earnings profile," Davies said.
"Tiwai Point is the main wildcard in the electricity sector in New Zealand at the moment. So, any uncertainty around there is not going to be a good thing for those share prices."
Genesis Energy rose 1.6 per cent to $3.14 on a volume of 915,000 shares.
Davies said a strong update from Australian healthcare manufacturer ResMed was flowing through to its New Zealand counterpart, Fisher & Paykel Healthcare, which rose 2.3 per cent to $23.95 on a volume of 738,000 shares.
The Reserve Bank of Australia announced it would hold its target cash rate at 0.75 per cent as it waits to see where the economy is headed. Davies said this decision was expected, but a potential future cut was possible and would have knock-on effects for Kiwi stocks.
"The reserve banks of the world will be watching closely what is happening in China and, counter-intuitively, if things do get bad over there and it does cause interest rate cuts, that will be beneficial to the market."
Among other stocks trading on more than a million shares, Spark New Zealand fell 0.3 per cent to $4.605, Oceania Healthcare fell 0.8 per cent to $1.19, Pushpay Holdings fell 0.2 per cent to $4.45, Precinct Properties New Zealand held at $1.88 and Metlifecare rose 0.2 per cent to $6.88.