NZ shares snap rally as investors digest looser lockdown

Fletcher Building shares dropped despite confirmation construction would be able to resume next week once the national lockdown is loosened. Photo / 123RF

New Zealand shares snapped a five-day rally as investors digested the impact of government plans to loosen the national lockdown next week.

The S&P/NZX 50 Index fell 16.05 points, or 0.1 per cent, to 10,762.67. Within the index, 24 stocks declined, 21 rose, and five were unchanged. Turnover was $177.8 million.

Prime Minister Jacinda Ardern today announced the national lockdown would be extended until Tuesday, April 28, adding an extra five days - although only two working days - to the initial four-week period. From next Tuesday, all businesses deemed to be capable of operating "safely" will be permitted to do so.

Peter McIntyre, an investment adviser at Craigs Investment Partners, said it was unsurprising to see the market turn weaker today after a "stellar run" last week with the best performance since 2001.

"The market was declining into that 4 o'clock announcement, then it strengthened up a little bit after the announcement, but within 25 minutes it had gotten a lot weaker again."

The benchmark index gained 8.2 per cent last week, its biggest weekly gain since 2001, as investors grew increasingly optimistic that the covid-19 pandemic was showing signs of slowing and on hopes that New Zealand's lockdown could be lifted as early as this Thursday.

That rally was led by a recovery in companies that had been hit the hardest by the virus outbreak, most notably in retail, tourism, travel, and accommodation.

Among those, Tourism Holdings fell 2.1 per cent to $1.38 today. Air New Zealand rose 6.1 per cent to $1.39, Kathmandu Holdings increased 1.3 per cent to 80 cents, and SkyCity Entertainment Group fell 1.6 per cent to $2.49.

Construction firms are among those able to resume work under the level 3 restrictions after more than a month of largely sitting idle.

Fletcher Building fell 1 per cent to $3.96. Building materials firms were also weaker, with Metro Performance Glass down 1.2 per cent at 17.1 cents and Steel & Tube Holdings falling 4.4 per cent to 66 cents.

Refining NZ led the market lower, falling 7.8 per cent to 95 cents. The operator of the Marsden Point refinery is reviewing its future and has said fundamental change is needed to stay competitive.

NZX dropped 7.3 per cent to $1.27, Mainfreight declined 3.2 per cent to $36.22 and Auckland International Airport fell 2.3 per cent to $5.97.

Mercury NZ rose 1 per cent to $4.45 after it trimmed full-year earnings guidance for a second time in two months, citing declining hydro-electric water storage in the North Island and demand reductions due to covid-19.

Genesis Energy fell 2.4 per cent to $2.88, Contact Energy declined 2 per cent to $6.40, and Meridian Energy rose 1.8 per cent to $4.45.

Kiwi Property Group held at $1.01. It reported a decrease of $290 million, or 8.5 per cent, in the value of its property portfolio due to the virus outbreak. McIntyre said the stock was heavily exposed to retail as the owner of Auckland's Sylvia Park mall.

"This is definitely portraying the impact covid has had on the retail side of their assets," he said.

Other property stocks were mixed. Argosy Property fell 1.4 per cent to $1.035, Investore Property declined 1.1 per cent to $1.76, Goodman Property Trust increased 3 per cent to $2.26 and Property For Industry rose 1.9 per cent to $2.10

Retirement village operator Metlifecare rose 6.2 per cent to $4.30. Today it said it rejected Asia Pacific Village Group's attempt to abandon the $1.49 billion takeover deal and appointed legal counsel in a sign it is willing to take the issue to court.

Restaurant Brands New Zealand rose 6.6 per cent to $12.05, the biggest gain on the benchmark index.