WELLINGTON: New Zealand shares fell, joining a global selloff, on concern declining oil prices and slowing Chinese exports signal weaker global growth. Mighty River Power, Contact Energy and Genesis Energy led the decline.
The S&P/NZX 50 Index slipped 29.43 points, or 0.5 per cent, to 6035. Within the index, 28 stocks fell, 15 rose and seven were unchanged. Turnover was $189 million.
Oil prices slumped to their lowest levels since 2009 after the Organisation of the Petroleum Exporting Countries agreed to keep production high despite depressed demand, stoking concerns a global glut would increase.
In New York, the Standard & Poor’s 500 Index fell 0.7 per cent overnight, as oil companies tumbled. In Asia on Tuesday, Hong Kong’s Hang Seng dropped 1.7 per cent and Japan’s Nikkei 225 Index shed 1 per cent in afternoon trading. Australia’s S&P/ASX 200 Index fell 0.8 per cent.
“Commodity prices and oil tend to reflect growth expectations, so having such weakness there is causing some people to question whether the global economy is quite as strong as they thought it was,” said Mark Lister, head of private wealth research at Craigs Investment Partners. “There’s general negative sentiment across markets everywhere at the moment, with very weak commodity prices across the board.”
Energy companies led the index down on Tuesday, with Mighty River Power dropping 3.6 per cent to $2.72, Contact down 2.6 per cent to $4.58 and Genesis down 2.5 per cent to $1.92. China reported a fifth monthly drop in exports Tuesday, adding to concern about global growth.
“This is just another indicator that tells you the Chinese economy is slowing down,” Lister said. Vector was the biggest gainer, up 2.3 per cent to $3.17. Synlait Milk rose 3.1 per cent to $2.63. Vital Healthcare Property Trust rose 2.2 per cent to $1.88. Fisher & Paykel Healthcare rose 1.5 per cent, and has gained 32 per cent this year.
