NZ shares join global sell-off on Trump's trade tweets; Freightways caution weighs

Offshore sentiment weighed on the local reporting season, which saw Freightways punished for its cautious outlook.

New Zealand shares joined a worldwide sell-off as US President Donald Trump spooked investors by ratcheting up his trade war with China. That weighed on the local reporting season, which saw Freightways punished for its cautious outlook.

The S&P/NZX 50 Index dropped 138.88 points, 1.3 per cent, to 10,483.47. Within the index, 43 stocks fell, three rose, and four were unchanged. Turnover was $103 million, with just four stocks trading on volumes of more than a million shares.

Stocks across the Asia Pacific followed Wall Street lower with investors spooked by Trump's escalating rhetoric with China. Hong Kong's Hang Seng was the hardest hit in Asia, down 3.1 per cent in afternoon trading, while Australia's S&P/ASX 200 Index fell 1.6 per cent and Singapore's Straits Times Index was down 1.7 per cent.

"Trump seems to be losing patience quite dramatically at the moment. It's lifted to another level and the markets were pretty keen to de-risk themselves over the weekend," said Peter McIntyre, an investment advisor at Craigs Investment Partners.

Still, the light trading volumes indicated that overseas investors weren't fleeing the New Zealand market, which would have weighed more heavily on the more liquid stocks, he said.

Fonterra Shareholders' Fund led the index lower, down 4.5 per cent to a record low $3.20 on a volume of 340,000 units, more than its 90-day average of 189,000.

Freightways fell 3.2 per cent to $7.89 after reporting a 2 per cent increase in annual profit, despite the slowing domestic economy. The courier and information management firm will seek to lift annual earnings in the current financial year through more efficient processes and by raising prices.

McIntyre said investors were nervous about the company's cautious outlook and the threat of margins coming under pressure.

Chorus fell 2.9 per cent to $4.99 on a volume of 224,000 shares - less than half its 90-day average - after reporting a 2.6 per cent decline in operating earnings, in line with expectations, and a surprise exit of chief executive Kate McKenzie.

McIntyre said McKenzie was highly regarded in the broking community and had been doing a reasonable job for the network operator.

Meridian Energy declined 2.1 per cent to $4.67 on a volume of 1.5 million shares after reporting a record profit on high production prices, increased generation, and a growing customer book in Australia. McIntyre said the company's increased dividend payment meant it remained a drawcard for investors in search of income while interest rates remain low.

Metlifecare decreased by 0.5 per cent to $4.38 after lifting underlying earnings 4 percent on robust demand for its retirement village units. It also lifted its dividend.

NZX reported the day's biggest increase, up 0.8 per cent at $1.25 on a volume of 164,000 shares, less than its 347,000 average. Trustpower rose 0.4 per cent to $7.73.

Spark New Zealand rose 0.1 per cent to $4.34 on a volume of 3.6 million shares - the most for the day. Of other stocks trading on volumes of more than a million, Fletcher Building fell 3.3 per cent to $4.43 and Auckland International Airport was down 1.9 per cent at $9.22.

Synlait Milk decreased 1.1 per cent to $9.15 after saying the Supreme Court will hear its appeal over the reinstatement of land covenants at its Pokeno site.

Outside the benchmark index, Steel & Tube Holdings dropped 4.4 per cent to 88 cents after the High Court increased the fine it will have to pay for making misleading representations about steel mesh products that fell short of testing standards.