Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


NZ shares drops to four-week low, tracking US stocks down

NZ shares drops to four-week low, tracking US stocks down after manufacturing activity slows

By Tina Morrison

Feb. 4 (BusinessDesk) – The New Zealand sharemarket dropped to a four-week low, tracking a decline on Wall Street, after a report showed US manufacturing activity grew at the slowest pace in eight months, fuelling concern about global growth.

New Zealand’s benchmark NZX 50 Index fell 58.331 points, or 1.2 percent, to 4,791.171 in morning trading. In the US, the Dow Jones Industrial Average dropped 2.1 percent, the Standard & Poor’s 500 Index sank 2.3 percent, while the Nasdaq Composite Index shed 2.6 percent.

Just three stocks advanced in early trading on the NZX 50. Xero led declines, down 5.6 percent to $37.30, tracking a fall in US technology stocks. Among local blue chip stocks to fall, Fletcher Building declined 0.7 percent to $8.90, SkyCity Entertainment Group slipped 2.1 percent to $3.72, Auckland International Airport dropped 1.4 percent to $3.58 and Contact Energy was down 0.6 percent to $5.07.

The Institute for Supply Management’s US factory index dropped to 51.3 in January from 56.5 a month earlier as orders slumped, a sign manufacturing cooled at the start of the year as winter storms hindered activity. Economists polled by Bloomberg had expected a reading of 56.

“The market is saying that is a pause in growth, is it weather related, that is a big question on the screens at the moment,” said Andrew Bascand, managing director at Habour Asset Management which holds about $1 billion in equities. “A lot of our stocks are owned by global investors and they are marking back our stock market relative to what’s happening overseas. In the course of the next month or two or even the next day or two I would expect this to unwind a bit.”

To be sure, the S&P 500, the benchmark for US equities, remains above its 200-day moving average of about 1,700, while US manufacturing remains in expansion with a reading above 50 and a return to normal climatic conditions may bolster future readings, Bascand said.

“We have still had some very good earnings announcements out of America and as we continue into the earnings season, I am expecting a bit more of the same,” Bascand said.

In New Zealand, strong growth is set to produce strong earnings, he said.

Traders are now turning their focus to a key US employment report due out Friday in Washington for an indication of how the world’s largest economy is tracking. Non-farm payrolls probably climbed by 185,000 workers in January after the coldest December since 2009 chilled job growth to just 74,000 that month, according to Bloomberg.

In Europe, the Stoxx 600 Index ended the day with a 1.3 percent slide from the previous close. The UK's FTSE 100 gave up 0.7 percent, Germany's DAX fell 1.3 percent and France's CAC 40 retreated 1.4 percent.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Reserve Bank: Labour Calls For Monetary Policy To Expand Goals

Labour's comments follow a speech today by RBNZ governor Graeme Wheeler in which Wheeler sought to answer critics who variously say he should stop lowering interest rates, lower them faster, or that inflation-targeting should no longer be the primary goal of the central bank's activities. More>>

ALSO:

BSA Extension And Sunday Morning Ads: Digital Convergence Bill Captures Online Content

Broadcasting Minister Amy Adams has today announced the Government’s plans to update the Broadcasting Act to better reflect today’s converged market... The Government considered four areas as part of its review into content regulation: classification requirements, advertising restrictions, election programming and contestable funding. More>>

ALSO:

March 2017: Commerce Commission Delays Decision On Fairfax-NZME

The Commerce Commission has delayed its decision on the proposed merger between NZME and Fairfax Media's New Zealand assets, saying the deal is complex and it needs more time to assess the impact on both news content and the advertising market. More>>

ALSO:

Plan Plan: Permanent Independent Hearings Panel Proposed For Planning

The Productivity Commission recommends creating a permanent independent hearings panel like the one that cut through local politics to settle Auckland’s Unitary Plan, for the whole country. More>>

ALSO:

Statistics: NZ Jobless Rate Falls To 5.1% Under New Methodology

New Zealand's unemployment rate fell more than expected in the second quarter as Statistics New Zealand adopted a new way of measuring the labour market to bring the country in line with international practices, and while a growing economy continued to support jobs growth. More>>

ALSO:

Eggs-it Strategy: Countdown Programme For Free Range And Barn Launches

Countdown has today launched an Egg Producer Programme to support free range and barn egg farmers to increase the supply available for Countdown stores and our customers. More>>

ALSO:

LVRs: Banks Get An Extra Month To Meet New Lending Restrictions

The Reserve Bank won't impose new lending restrictions for highly-leveraged investment purchases until the start of October, giving lenders an extra month to clear their backlog of pre-approvals. More>>

ALSO:

Commerce Commission: Charges Against Youi Insurance

The Commerce Commission has filed charges in the Auckland District Court against insurance firm Youi NZ Pty Limited, alleging it employed misleading sales techniques when attempting to sell policies to consumers who were only seeking a quote. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news