Headlines have been dominated by the coronavirus outbreak over the past week and a half as investors started assessing the potential impact on the global economy.
Up to 8,000 cases of the virus have been reported in China, US authorities confirmed the first case of human-to-human transmission in the US, Russia closed its land border with China and the Ministry of Health reported a suspected infection in Auckland.
The New Zealand dollar eased further overnight, falling below 65 US cents for the first time since early December, as anxiety about the coronavirus crisis crowded out other data that investors usually focus on. While bad news for some, the weak currency will be a welcome boost to exporters like F&P Healthcare, which derives most of its income overseas.
F&P Healthcare rose 3.1 per cent to $23.3 on a volume of 901,000 shares, and got a strong lead from upbeat earnings from Phillips Healthcare and California-based healthcare firm ResMed.
Europe's largest asset manager, Amumdi said today that the trough for markets could come in advance of the peak of the epidemic, as markets tend to overreact at the beginning of a crisis and then stabilise and rebound, despite the continuation of the negative news flow.
Travel and tourism companies have been the hardest hit by the fears over the outbreak. Some of those stocks recovered today.
Tourism Holdings led the market higher, up 4.6 per cent at $2.99 on a volume of 210,000 shares. Air New Zealand rose 2.2 per cent to $2.82 on a volume of 1.5 million shares, and Auckland International Airport rose 1.2 per cent to $8.65 on a volume of 1.8 million shares.
Solly said the airport has an attractive long-term position and investors may look through a worrying near-term event and see an opportunity to buy into a business that delivers good returns over the medium term.
SkyCity Entertainment Group fell 1.4 per cent to $3.64 on a volume of a million shares.
A2 Milk, which has a large exposure to Chinese consumers, fell 2 per cent to $15 on a volume of 1.3 million shares.
"A2, pulling back from a very strong run, obviously has a result in a few weeks, so we'll look forward to getting a bit more detail there. We are seeing that in a few other stocks, that people are taking a bit of money of the table," Solly said.
Businesses such as Spark New Zealand and Ebos Group were likely absorbing some of that risk as they can perform relatively well if the economy is in a slow phase for an extended period, Solly said.
Spark rose 0.8 per cent to $4.66 on a volume of 4.6 million shares, Ebos rose 0.6 per cent to $23.85 on a volume of 108,000 shares.
Among other stocks trading above a million shares, Oceania Healthcare held at $1.22, Precinct Properties New Zealand rose 0.3 per cent to $1.88, Metlifecare fell 0.2 per cent to $6.87, Meridian Energy rose 1.6 per cent to $5.34, Fletcher Building fell 1.8 per cent to $5.55, Sky Network Television fell 2.8 per cent to 69 cents, Mercury NZ rose 1.4 per cent to $5.24 and Goodman Property Trust fell 0.2 per cent to $2.32.
Solly said investors were looking forward to a busy reporting season which will give another snapshot of where companies are tracking.
"In the meantime, we can expect interest rates to stay reasonably low and supportive for capital markets," he said.
