NZ sharemarket opens sharply lower after OCR cut

Sharemarket graph
The benchmark top-50 index opened down about 1.3 percent in early trading. Photo credit: Getty.

The central bank cut its benchmark interest rate by three quarters of a percentage point, to support the economy against the impact of the Covid-19 coronavirus.

It came as the US Federal Reserve also cut rates to a target range of 0 percent to 0.25 percent.

The benchmark top-50 index opened down about 1.3 percent in early trading.

This followed the near 5 percent fall on Friday.

However, travel-related stocks were hammered again after the government imposed strict entry conditions on travellers over the weekend.

Auckland Airport's shares fell 12 percent after it withdrew the earnings forecast it made last Friday.

Air New Zealand was in a trading halt after it announced major cuts to international services, plans to reduce local flights by as much as a third, and lay off staff.

Campervan rental company Tourism Holdings fell 26 percent.

Other notable falls were Sky TV, down 10 percent, as it said it was still working through the impact on its finances from the wholesale cancellation of sports competitions which it screens.

Unlike last week, there was also a smattering of price rises, with ANZ and Westpac banks posting solid rises after the Reserve Bank's rate decision, and its decision to delay tough new minimum capital rules that were due to come into effect in July.

Some companies seen benefiting from the weaker New Zealand dollar were also positive including Fisher and Paykel Healthcare and Synlait Milk.

The New Zealand dollar is sitting at a near 11-year low of 59.8 US cents.

RNZ.

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