Market close: Big price swings for leading stocks

After the heady rises in individual stocks and the leading index last year, the New Zealand sharemarket has moved into a correction trend with another one per cent plus drop.

The market had its sixth successive day of falls and some leading stocks, such as Fisher and Paykel Healthcare and the energy companies, are having big price swings – one minute sitting high on the gainers board and then just as quickly disappearing.

The S&P/NZX 50 Index fell 186.33 points or 1.43 per cent to 12,838.36 after reaching an intraday high of 13,114.50. There were 43 gainers and a dominating 104 decliners over the whole market on volume of 60.3 million share transactions worth $125 million.

Greg Smith, head of research for Fat Prophets, said a correction does appear to be underway to a certain extent – the negative sessions are now stacking up.

“Perhaps optimism has been replaced by a dose of realism. The world still has coronavirus, the vaccine will take time to roll out, and it looks like our border – and the tourism sector – won’t open up to more visitors and countries as quickly as we may have thought.

“Maybe the hot air has come out of the markets both here and overseas – some are saying US equities are the most over-valued since before the 1929 crash,” Smith said. “A crash here is highly unlikely – we had one last year – and equities remain appealing for dividend yields compared with what you get from bonds or cash in the bank.”

Smith said the market was in a waiting mood before the latest financial reporting season – the United States is imminent and New Zealand’s next month.

Fisher and Paykel Healthcare went from an intraday high of $32.99 in the early morning trade to $31.42 at the close, falling 22c on trade worth $16.9m.

Auckland International Airport was also heavily traded, shedding 23.5c or 3.10 per cent to $7.335 on trade worth $17.7m. Ebos Group was down 41c to $28.50; a2 Milk declined 26c or 2.36 per cent to $10.75; Serko fell 19c or 3.31 per cent to $5.55; and Spark was down 9c or 1.86 per cent to $4.75.

Port of Tauranga fell 21c or 2.73 per cent to $7.49, while Napier Port gained 8c or 2.41 per cent to $3.40. Pacific Edge continued to fall after its recent strong run, down 7c or 6.19 per cent to $1.06. Tourism Holdings was down another 8c or 3.39 per cent to $2.28.

The energy stocks continued to run out of puff after their frenetic rises. Contact was down 37c or 3.87 per cent to $9.18, Meridian fell 43c or 5.46 per cent to $7.44, Mercury slipped 2c to $6.90, and Genesis decreased 10c or 2.7 per cent to $3.60.

Ryman Healthcare, which has been having a roller-coaster ride, climbed 20c to $14.75; rival Summerset Group Holdings increased 9c to $12.04; Freightways gained 15c to $10.40; Infratil moved ahead 9c to $7.25; and Restaurant Brands – another up and down stock – rose 38c or 3.39 per cent to $11.58.

Kiwifruit grower and packer Seeka continues to find favour, rising 10c or 2.12 per cent to $4.81 after sitting at $3.95 on December 4.

Electronics manufacturer Rakon rose 3c or 3.95 per cent to 79c after increasing its operating earnings forecast by $4m. Rakon said the roll-out of 5G networks globally has resulted in greater demand for its products, and its ebitda for the financial year ending March is expected to be $20m-$22m compared with the previous guidance of $16m-$18m. Ebitda for the previous corresponding period was $14.8m.

Vista Group International has appointed NZX chair James Miller as an independent director, and its share price slipped 1c to $1.53. Miller is also a director of ACC, Mercury NZ and Refining NZ.

Blackwell Global Holdings is winding down its finance company operations after failing to raise sufficient capital to fund the growth of its loan book. Blackwell is now looking at a reverse takeover, and its share price sits at 0.008c, down 0.001c or 11.11 per cent.

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