New Zealand shares joined the global malaise in stock markets across Asia as investors fretted over the pace of presumed interest rate cuts, triggering a selloff in bonds most keenly felt in the UK, where the yield on 10-year gilts hit their highest since 2008.
The S&P/NZX 50 index dropped 99.37 points, or 0.8%, to 12,943.74 in relatively light trading, with just Spark New Zealand and Mercury NZ trading on volumes of more than a million shares. The yield on the 10-year New Zealand government bond rose 6 basis points to 4.54% at 5pm in Auckland from yesterday, while the kiwi dollar dropped to 55.97 US cents from 56.45 cents on Wednesday.
Stock markets were generally weaker across Asia, with interest rate sensitive stocks among those posting the biggest declines in New Zealand.
Retirement village operator Ryman Healthcare led the NZX50 lower, falling 4.7% to $4.51, while Goodman Property Trust declined 1.9% to $2.06 and Auckland International Airport slipped 1.8% to $8.38. National carrier Air New Zealand declined 1.7% to 59 cents.
Powering through summer
Energy companies were broadly weaker, with wholesale electricity prices climbing to a four-week high. Mercury – which is tipped as being pulled from the MSCI standard index later this month – fell 1% to $5.90 while Contact Energy – the presumed replacement – dropped 1.4% to $9.52. Meridian Energy slipped 0.5% to $5.90 and Genesis Energy declined 0.9% to $2.19.
Australia’s S&P/ASX 200 index was down 0.5% in late trading, with stronger than expected retail spending in November raising doubt on an early rate cut across the Tasman. The kiwi traded at 90.29 Australian cents from 90.41 cents yesterday.
The dual-listed banks were weaker, with ANZ Group Holdings falling 2.4% to $32 and Westpac Banking Corp sliding 0.8% to $36.85.
Still, retailers with exposure across the Tasman gained. Michael Hill International rose 1.2% to 64 cents and KMD Brands advanced 1.2% to 42 cents.
Big-box retail landlord Investore Property posted the biggest gain on the NZX50, up 2.7% at $1.15.
Reporting by Paul McBeth. Image from Curious News.