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Stronger Mainfreight, A2 Milk not enough to push NZX50 into the black

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The New Zealand sharemarket fell 0.2 per cent on Monday, in contrast to gains in Australia, as a stronger A2 Milk and Mainfreight failed to hoist the NZX into the black.

The benchmark S&P/NZX50 Index closed down 31.8 points at 13,227.7, following a 0.4 per cent slip on Friday.

Hamilton Hindin Greene director Grant Williamson​ said it was a dull start to the week with the main piece of news from milk processor Synlait, which posted its first annual loss since listing eight years ago.

“Its financial loss was very much in line with guidance, but the forward comments were quite positive,” Williamson said.

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* Synlait Milk posts $28.5m loss, eyes return to ‘robust profitability’ this year

Synlait reported a loss of $28.5 million in the year to the end of July, at the top end of its forecast for a loss of $20m to $30m.

However, investors took heart from the company’s comments that it expected to return to form by 2024, when it expected to report similar levels of profitability, operating cash flows and debt ratios as it had in recent years.

The NZ sharemarket fell 0.2 per cent on Monday, in contrast to gains in Australia.

LAWRENCE SMITH/Stuff

The NZ sharemarket fell 0.2 per cent on Monday, in contrast to gains in Australia.

Shares in Synlait jumped 7.8 per cent to $3.56. Its biggest customer, A2 Milk, also got a boost, closing up 2.8 per cent at $6.06.

Top stock Fisher & Paykel Healthcare was down 0.4 per cent at $32.12, while number two Meridian Energy fell 0.3 per cent to $5.18. Fellow blue chip power stock Contact Energy was up 1.5 per cent at $8.41.

Mainfreight strengthened again after some weakness last week, said Williamson. Shares in the transport company gained 0.5 per cent to $95.52, hovering just below the “golden mark” of $100.

Rubber manufacturer Skellerup rose 1 per cent to a record $6.00, following its annual result last month. The company posted a record annual net profit of $40.2m, up 38 per cent on its previous result, which was also a record.

”Analysts are quite bullish,” said Williamson.

Across the Tasman, Australia’s S&P/ASX200 Index was up 0.5 per cent, or 41.4 points, at 7384 in late afternoon trading.

On Wall Street on Friday, a choppy week of trading ended with a mixed finish for the major stock indexes.

The benchmark S&P 500 rose 0.1 per cent to 4455.48, now within 1.9 per cent of the all-time high it set near the start of September.

The blue chip Dow Jones Industrial Average added 0.1 per cent to 34,798, and the tech-heavy Nasdaq slipped less than 0.1 per cent to 15,047.70.

United States markets have had a rough September and investors could be in for more volatility given various concerns, including Covid-19 and its lingering impact on the US economy, along with a slow recovery for the employment market.

Worries over troubled Chinese real estate developer Evergrande still weighed on global markets.

– With AP

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