Israel’s attack on Iranian nuclear sites sent shockwaves through markets across Asia, pushing up oil prices and sapping demand for risk-sensitive assets such as the kiwi dollar, while equity markets including the S&P/NZX 50 index were sent tumbling.
Global logistics firm Mainfreight was one of the major drags on the local benchmark index, while software firms Gentrack, Vista Group International and Serko were also near the bottom of the leaderboard.
Auckland International Airport declined while Air New Zealand was unchanged, as rising oil prices added to the unease about international travel in the wake of the Air India crash in Ahmedabad in India.
Meanwhile, Scales Corp remained the flagbearer for the primary sector as the Fieldays agricultural showcase wrapped up in Mystery Creek near Hamilton today.
So close
The NZX50 sank 96.23 points, or 0.8%, to 12,552.87, with 38 decliners, eight gainers, and four stocks unchanged. That pushed the benchmark into a weekly decline of 0.1%.
Turnover across the main board was $148.7 million.
Stocks across Asia were weaker as Israel attacked dozens of targets in Iran in an attempt to disrupt Tehran’s nuclear programme, and prime minister Benjamin Netanyahu said the operation will last as long as it has to. Iran retaliated by launching 100 drones towards Israeli territory.
Japan’s Nikkei was down 1.2% in late trading while Hong Kong’s Hang Seng fell 0.9% and Australia’s S&P/ASX 200 index declined 0.4%. The New Zealand dollar dropped to 60.08 US cents at 5pm in Auckland from 60.64 cents at 7am and 60.32 cents yesterday.
Tech companies were among the hardest hit, as optimism about the sector from Oracle’s strong result overnight faded.
Gentrack led the local market lower, falling 3.6% to $11.37, while Vista dropped 3.2% to $3.58 and Serko declined 2.4% to $2.90. Outside the benchmark index, Eroad fell 2% to $1.48.
Meanwhile, logistics group Mainfreight weighed on the index as it fell 2.6% to $67.01, with rising oil prices and heightened geopolitical tensions adding to the uncertainty for international trade.
Fallout
The crash of an Air India Boeing 787 Dreamliner, killing most than 240 people, weighed on airlines and planemaker Boeing during the Northern Hemisphere trading session. Air New Zealand ended the day unchanged at 59.5 cents, while Auckland International Airport fell 0.3% to $7.965 on the day’s heaviest trading volume of 2.7 million shares.
Scales Corp posted the day’s biggest gain on the benchmark, rising 1.9% to $4.88 as it continued to enjoy support after raising earnings guidance.
The annual Fieldays agricultural event has been on in Waikato this week, with retailers and vendors saying there was a good level from spending farmers, who’ve benefited from strong meat and dairy prices.
Greg Smith, head of retail at Devon Funds Management, said investors will be watching out for central bank meetings in the US, UK and Japan next week, with just the Bank of England expected to move.
“Central banks are still facing uncertainty. The Fed’s not going to do anything,” Smith said.
Reporting by Paul McBeth. Image from Timon Studler on Unsplash.
