Global markets tumbled overnight as coronavirus continues to spread globally to more than 30 countries, with South Korea reporting a jump in infections and Italy locking down an area of 50,000 people near Milan.
The US market (S&P500) reported its largest single day fall since August, down -3.4% with the Energy and Tech sector taking the brunt, with tech company AMD leading losses being a chipmaker exposed to China. Oil tumbled -5% to US$50.62 per barrel on concerns of weaker demand and slower economic activity, while Spot gold rallied +1.8% to US$1,674/ounce as a safe haven.
Stock in Focus: Delegat Group Limited (DGL:NZX)
In a sea of red yesterday Delegat's was the best performer on the NZ market as its shares jumped up +4.5% after announcing record sales volume of 1.7 million cases for the first half of their 2020 financial year. Operating net profit after tax came in at $34.4m for the half, up +10% from the same corresponding period last year.
The winemaker said it was on target to achieve 3.2m annual case sales for the 2020 financial year, up +8% from the previous year and maintained their flat earnings guidance for the 2020 full year.
We currently have a BUY rating on DGL.
Australia & New Zealand Market Movers
The Australian market tumbled on Monday (ASX 200 Index -2.3%). Stocks exposed the economic fallout from the virus outbreak posted some of the biggest falls particularly in the tourism sector, as Qantas tumbling down -7.5%, Webjet was down -8.3% and Flight Centre slid -4.9%. Falls in the oil price triggered an energy sector sell-off, with Woodside down -6.4% and Santos slipping 3.3%.
Company specific news was light however, as Dreamworld owner Ardent Leisure closed -16.3% lower after a coroner's report into the deaths at the company's Gold Coast theme park in 2016 was handed down. G8 Education fell -5.2% after cutting its final dividend following reporting lower earnings and net profit for the year, following increased investment in its greenfield portfolio.
The New Zealand market fell yesterday (NZX50 -1.8%) largely due to the news that the coronavirus is spreading globally, and not as well contained as previously anticipated, with loses felt across the board. The market was led lower by Air NZ down -5.5%, after the airline lowered its earnings guidance due to weak demand (caused by the coronavirus) ahead of it's result announcement, later this week. Likewise tourism facing stocks were hit hard, Auckland International Airport fell -3.8% and Tourism Holdings down -4.2%. Chorus was the only stock on the NZX50 to gain more than 1% rising 5.6% percent after it signalled plans to pay bigger dividends.
3 Things Markets Will be Watching this Week
- Coronavirus headlines are likely to sway investor sentiment.
- Local earnings season across Australia & NZ continues this week.
- Overseas earnings season winds down.
Have a Great Day,