NZ shares join global lull as investors remain nervous

New Zealand shares joined a global decline. Photo / File

New Zealand shares joined a global decline as investors remain unnerved by heightened geopolitical tensions. Domestic earnings met expectations but failed to stoke local investor confidence.

The S&P/NZX 50 Index fell 17.97 points, or 0.2 per cent, to 10,854.77. Within the index, 23 stocks declined, 21 rose, and six were unchanged. Turnover was $107.4 million, with five stocks trading on volumes of more than a million shares.

Stocks across Asia followed Wall Street lower after pro-democracy protests in Hong Kong closed the autonomous region's airport and goaded mainland Chinese officials to dub the demonstrations as the first sign of "terrorism". Hong Kong's Hang Seng Index was down 1.9 per cent in afternoon trading, while Singapore's Straits Times Index dropped 0.8 per cent and Australia's S&P/ASX 200 Index decreased 0.4 per cent.

"The local market's off in reaction to what's happening offshore - it's not a big decline though," said Grant Williamson, a director at Hamilton Hindin Greene.

Meridian Energy, the country's biggest listed company, led the market lower, down 2.4 per cent at $4.88 on a volume of 1.3 million shares, in line with its 90-day average of 1.4 million.

Of other blue-chip stocks to decline, Spark New Zealand fell 1.1 per cent to $4.055 and was the most heavily traded company on a volume of 2.5 million shares, Fletcher Building slipped 0.6 per cent to $4.69, Auckland International Airport decreased 0.9 per cent to $9.74 and Air New Zealand dipped 0.2 per cent to $2.75.

Kiwi Property Group rose 0.3 per cent to $1.64 on a volume of 1.5 million shares and Mercury NZ increased 0.2 per cent to $4.98 on a volume of 1 million.

Williamson said the three companies that reported earnings today - NZX, Summerset Group, and PGG Wrightson - largely met expectations.

NZX was unchanged at $1.20 after reporting a 4.3 per cent increase in first-half operating earnings and flagging a better result was still to come in the annual result.

"The share price had been moving up ahead of the result and it's pretty much as the market expected," Williamson said.

Summerset increased 0.5 per cent to $5.87. It reported first-half underlying earnings up 6 per cent, and signalled interest in entering Melbourne, where larger rival Ryman Healthcare has branched out. Williamson said investors expect Summerset to improve in the second half of the year but will be watching any foray across the Tasman with interest.

Ryman shares increased 0.2 per cent to $13.53, Oceania Healthcare was up 2 per cent at $1.04, Arvida Group was unchanged at $1.40 and Metlifecare decreased 0.2 per cent to $2.275.

Outside the benchmark index, PGG Wrightson resumed trading after a 10-for-1 share consolidation. The rural services firm reported a record annual profit due to a one-off gain on the $434m sale of its seeds division to DLF Seeds, of which it returned $234m to shareholders. Underlying earnings dropped 29 per cent as farmers kept spending in check as they contended with the Mycoplasma bovis outbreak and amid a general malaise in the rural sector. The shares, which were adjusted for the consolidation, dropped 4.2 per cent to $2.35.

Williamson said it's typical for a stock to decline after a share consolidation, and that a number of investors probably took the opportunity to exit after pocketing the capital return.

SkyCity Entertainment Group posted the day's biggest gain, up 3.1 per cent at $4.01 on a volume of 758,000 shares, in line with its 787,000 average. The casino operator is scheduled to report annual earnings tomorrow.

Williamson said the company's result will be interesting to watch now that SkyCity has sold a number of assets, such as the Darwin casino and its Auckland parking concession. The stock has underperformed the benchmark, with a 13 per cent gain so far this year compared to a 23 per cent increase for the NZX50.

Fonterra Shareholders' Fund units recovered some of yesterday's loss, up 1.1 per cent at $3.61. Fonterra Cooperative Group yesterday put the kybosh on a dividend this year, saying it will report an annual loss of up to $675m with impairment charges of more than $800m worldwide.

Contact Energy increased 0.7 per cent to $8.32 after yesterday reporting a 12 per cent lift in annual operating earnings.

Bank of New Zealand's 2022 bond paying annual interest of 3.86 per cent was the most traded debt security on a volume of 593,000. The notes closed at a yield of 1.47 per cent, down 1 basis point.