NZX 50 falls as F&P Healthcare slips

The S&P/NZX 50 fell 33.31 points, or 0.3%, to 13,041.30. Turnover was $125 million.

Fisher & Paykel Healthcare – which alone comprises 13% of the benchmark – had a particularly significant impact as it fell 2.6% to $31.60, after climbing 4% last week.

Forsyth Barr gives the stock a target price of $32 per share and expects a sharp drop in revenue in the manufacturer’s half-year report later this month.

Increased vaccination rates in key markets have been reducing the number of hospitalisations and likely resulting in hospitals holding plenty of hardware stock, analysts said last month.

The volatile stock has traded near $34 and below $30 in the past three months.

Shares in A2 Milk Company dropped 3.2% to $6.46. The infant formula exporter is holding its annual general meeting next week.

Two other stocks reporting earnings this week saw declines today: Pushpay Holdings fell 1% to $1.87 and Mainfreight declined 1.9% to $88.

Many listed firms are being repriced by investors after market interest rates climbed dramatically during October.

Some economists are warning inflationary pressure may persist, even if covid becoming endemic in NZ causes economic activity to slow.

Financial markets are pricing the official cash rate to be 2.25% this time next year, with a 0.25% increase later this month seen as a certainty.

Castle Point Funds partner, Stephen Bennie said there were signs investors were adjusting their portfolios based on higher inflation and interest rate expectations.

However, he said trying to interpret short-term share price movements was “not much better than reading tea leaves”.

Some stocks that have been badly affected by the pandemic got a boost today after media reported over the weekend that Pfizer had developed an effective covid-91 treatment pill.

Its new drug, Paxlovid, was found to reduce the risk of hospitalisation or death by 89% in trials, which saw an index of travel and tourism stocks jump 4.3% on Friday night.

This morning, NZX-listed travel and entertainment stocks picked up the baton.

Vista Group International – which is hoping for global cinemas to reopen – jumped 3.9% to $2.65, Tourism Holdings climbed 3.2%, and Air NZ was up 1.5% at $1.68.

Auckland International Airport had its own set of good news today after Sydney Airport agreed to a near $25 billion takeover offer.

The consortium of private buyers will A$8.75 per share, up the initial offer of A$8.25. Auckland Airport rose 1.4% to $8.22 after the announcement.

The NZ dollar was trading at 71.07 US cents, virtually unchanged from Friday.

BNZ strategist Jason Wong said 72 US cents was “close to the top of the expected trading range” and the currency may dip below 70 cents before the end of the year.