New Zealand shares fell for a third day as investors attempted to price the risk posed by coronavirus. Tourism-related companies including Tourism Holdings and Air New Zealand led the market down.
The S&P/NZX 50 Index declined 122.03 points, or 1 per cent, to 11,685.11. Within the index, 35 stocks fell, 10 rose, and five were unchanged. Turnover was $117.8 million, with trading bouncing back as investors returned from holidays.
Grant Davies, an investment adviser at Hamilton Hindin Greene, said the NZX was following a negative lead from global markets as fears surrounding coronavirus escalate.
"When global markets get the jitters, New Zealand is never going to be immune to that," he said.
"It is not a reflection on the companies per se, but it's more a reflection on global growth expectations being pared back as investors try to account for the risk of a slowdown."
Markets across Asia were down today. Japan's TOPIX fell 0.8 per cent, Singapore's Straits Times Index fell 2.5 per cent and Australia's S&P/ASX 200 fell 1.5 per cent.
Travel-related stocks, including airlines, casinos and hotels, were the worst-hit on Wall Street. New Zealand followed this trend and stocks with exposure to the Chinese tourism market all fell.
Tourism Holdings fell 4.8 per cent to $2.80 on a volume of 1.2 million, despite chief executive Grant Webster saying the company has yet to feel any impact of the coronavirus at the operational level.
Stephen Innes, chief market strategist at AxiCorp, said traders are "flying blind" as the extent of the damage from the new coronavirus is still unknown,
"Given what's known at this stage amid China's massive and continuous contribution to the worldwide economy - the direction of travel in growth proxies makes sense," he said.
Other tourism-related shares have also suffered from coronavirus jitters with Air New Zealand shedding 1.6 per cent to $2.865 on a volume of 2.5 million shares, Auckland International Airport dropping 2.3 per cent to $8.55 on a volume of 1.1 million shares and SkyCity Entertainment Group falling 3.2 per cent to $3.90 on a volume of 1.4 million shares.
Air New Zealand said it carried 1.8 million passengers in December, up 3.2 per cent from a year earlier. Of those, 118,000 came from Asia, Japan and Singapore, up 24 per cent on the year.
Today the company also announced it has amended the definition of its $350m to $450m earnings guidance to make it clear several significant items are not included, as it looks down the barrel of a hit to full-year earnings of as much as $50m due to accounting changes and restructuring costs.
Davies said it was hard to separate this news from the fear of coronavirus hanging over the airline's outlook.
A2 Milk fell 1.6 per cent to $15.47 on a volume of 530,000 shares. Davies said while some movement was not unusual for the stock, fears of a downturn in their key consumer market in China may be impacting the share price.
China is New Zealand's largest trading partner, accounting for almost 25 per cent of total exports.
Stocks across the board fell, with the biggest decliners outside the tourism sector. Mainfreight fell 4.7 per cent to $41 on just 44,000 shares and Oceania Healthcare dropped 3.1 per cent to $1.25 on 930,000 shares.
"While the tourism pattern is fairly evident, the whole market is feeling the pinch," Davies said.
"Asian markets are all off and the New Zealand market's actually the best performing. It's not a great day in the markets generally."
Among the few stocks that gained ground today were Argosy Property, which rose 0.7 per cent to $1.44 on a volume of 616,000 shares, Goodman Property Trust which rose 0.7 per cent to $2.32 on a volume of 1.2 million shares and Investore Property which rose 0.6 per cent to $1.82.
Kiwi Property Group fell 0.6 per cent to $1.56 on 789,000 shares, and Precinct Properties fell 0.5 per cent to $1.88 on 1.3 million shares,
Metlifecare fell 0.2 per cent to $6.88, below its $7 takeover offer, with 1.6 million shares traded.