Market close: GDP data, US Fed tapering fails to sway investors

A better-than-expected New Zealand gross domestic product figure and a positive reaction to the latest United States Federal Reserve move failed to sway the local sharemarket, falling around half a per cent for the third successive day.

The S&P/NZX 50 Index was down 91.87 points or 0.71 per cent to 12,777.54, after reaching an intraday high of 12,912.16.

Trading was light with 36 million shares worth $137.69 million changing hands, and there were 55 gainers and 78 decliners over the whole market of 187 stocks.

Gross domestic product declined 3.7 per cent in the September quarter of Covid lockdowns – the second largest fall since 1986. But it was better than the Reserve Bank’s forecast of minus 7 per cent and analysts’ predictions of around minus 4.5 per cent.

ANZ Research said the relatively small contraction suggested many businesses have learned to operate better through lockdown compared with last year. However, for some the economic pain is still immense.

ANZ economists believe the economic growth in the next two quarters will be more muted than the Reserve Bank forecast of 5.8 per cent in December and 2.6 per cent in March because of a cooling housing market, and tighter monetary conditions and labour market. And of course there’s nervousness about whether the spread of Omicron will affect the border re-opening.

The US Federal Reserve, as expected, is winding down its bond-buying programme and economic support at a faster pace, and signalled three interest rate hikes next year, probably starting in March, to counter inflation running at 6 per cent.

That certainty at least provided renewed confidence for Wall Street, with the technology-driven Nasdaq Composite rebounding 2.15 per cent to 15,565.58 points; S&P 500 stopped just short of its all-time, rising 1.63 per cent to 4709.85; and the Dow Jones Industrial Average was up 1.08 per cent to 35,927.43.

At home, Fisher and Paykel Healthcare led the market down, falling 83c or 2.55 per cent to $31.77; a2 Milk drifted further, declining 14c or 2.36 per cent to $5.78; Synlait Milk shed 6c to 3.38; Auckland International Airport decreased 5c to $7.55; and Air New Zealand was down 2c to $1.53.

Port of Tauranga shed 12c to $6.81; Napier Port declined 5c to $3.01; Sanford fell 17c or 3.37 per cent to $4.87; Restaurant Brands decreased 22c to $15.30; Briscoe Group lost 18c or 2.61 per cent to $6.71; and Vulcan Steel was down 11c to $9.47.

Chorus was down 15c or 2.12 per cent to $6.93 after receiving the final regulatory framework for fibre from the Commerce Commission. Chorus is allowed maximum revenue of $690.2m-$789.5m for fibre for the first regulatory period of 2022-2024, with total revenue of $2.227 billion – slightly up from the commission’s initial May determination of $689m-$786m for fibre and total revenue of $2.219b. Chorus’ regulated asset base is now $5.425b, and its recent 300-megabit speed fibre upgrade means New Zealand is poised to enter the top 10 global connectivity speed rankings.

Hospitality group Savor fell 5c or 8.62 per cent to 53c.

The High Court has approved the Tauranga Energy Consumer Trust (TECT) restructure, freeing up Trustpower to sell its retail business to Mercury Energy during the first quarter of next year for $441m. Mercury, up 8.5c to $6.06, will then have 780,000 energy and telco connections.

Trustpower, which will concentrate on generation, gained 1c to $7.22, and its 51 per cent shareholder Infratil was down 13c to $7.87. TECT has a 26.8 per cent shareholding in Trustpower.

Amongst the other energy stocks, Contact declined 13c to $7.78; Genesis decreased 3c to $2.85; and Meridian increased 6.5c or 2.17 per cent to $4.665.

Sky Network Television surged another 10c or 3.8 per cent to $2.73 after signing a conditional agreement with Goodman Property Trust for the $56m sale of its three Auckland Mt Wellington properties, comprising 17,250 sq m. Sky TV will lease back the Studio One building for production.

Refining NZ – looking for new opportunities – rose 5c or 5.75 per cent to 92c after telling the market it has signed a memorandum of understanding with Fortescue Future Industries to study the feasibility of producing, storing and distributing green hydrogen from Marsden Point.

Earlier, Refining NZ’s $5m share purchase plan was over-subscribed at $9.5m, which it will add to the earlier $39m placement, taking the total capital raising to $48.5m for developing private storage facilities at its Marsden Point fuel import terminal.

Other gainers were Ryman Healthcare, up 8c to $12.45; TradeWindow rising 7c or 3.89 per cent to $1.87; The Warehouse Group collecting 10c or 2.5 per cent to $4.10; EROAD increasing 21c or 4.29 per cent to $5.10; and Pacific Edge up 4c or 2.99 per cent to $1.38.

Rakon’s chief operating officer Dr Sinan Altug is taking over as chief executive in April from Brent Robinson who is switching to chief technology officer after 35 years leading the executive team. Rakon’s share price was unchanged $1.80.

Vital Healthcare Property Trust’s portfolio will likely receive a revaluation gain of $140m for the six months ending December, taking the total value to $2.9b. Vital Healthcare’s share price was up 4.5c to $3.18. Kiwi Property slipped 2c to $1.155.

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