The S&P/NZX 50 Index fell by 1.5 per cent to 12,264.49, marking its lowest level in two and a half weeks. The sell-off was widespread, with 111 stocks declining and only 24 showing gains.
The drop followed a disappointing US jobs report released on Friday, which revealed a higher-than-expected unemployment rate. This news heightened concerns about the US economy’s health and contributed to a broader market correction. Wall Street had already faced turbulence, with the Nasdaq slipping into correction territory, having fallen 10 per cent from its peak.
The impact of these global concerns was felt strongly in New Zealand, where the local market reacted to international uncertainties. Investment adviser Grant Davies noted that, despite a strong performance in July, New Zealand markets were now adjusting to the negative news from the US and other regions.
Asian stock markets also experienced significant declines. Japan’s Nikkei 225 dropped 7 per cent to a seven-month low, Australia’s S&P/ASX 200 fell by 2.8 per cent, and India’s BSE Sensex decreased by 1.8 per cent. This regional downturn added pressure on New Zealand’s market, exacerbating the decline in local stocks.
Exporters in New Zealand, particularly those with significant exposure to the US, faced increased challenges. Fisher & Paykel Healthcare, which relies heavily on the US market, saw its shares decrease by 3 per cent to $31.78. Other exporters also suffered, including Air New Zealand, which fell by 3.4 per cent, and seafood company Sanford, which dropped by 2.2 per cent. The weaker Kiwi dollar, trading at 59.43 US cents, provided little relief for these companies.
In the financial sector, dual-listed Australian banks like ANZ and Westpac led the index lower, with ANZ falling by 5.4 per cent and Westpac declining by 2.6 per cent. Meanwhile, local financial institutions such as Heartland Group, which recently acquired Challenger Bank, also saw a minor dip of 0.9 per cent.
On the positive side, some stocks showed resilience. Manawa Energy led the gains on the benchmark index, increasing by 2.3 per cent, and Sky Network Television rose by 2 per cent. The NZX, the stock market operator, saw a modest increase of 0.8 per cent to $1.22, buoyed by recent comments from Finance Minister Nicola Willis about potential opportunities with Kiwibank.
Amid these fluctuations, Kiwi Property Group and Fletcher Building faced declines, while Contact Energy and Spark NZ posted small gains. The day’s trading volume was notably high, with Arvida being the most traded stock, ending unchanged at $1.63.
Overall, New Zealand’s market reflected broader global anxieties, and investors will be watching closely for further developments in the US and other major economies as they navigate this period of uncertainty.
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