Mainfreight, China optimism drive stocks higher

The benchmark S&P/NZX 50 index ended at 12,327.89, up 179.29 points or 1.48%, and building on Thursday’s 2% gain.

There were 78 rises and 52 falls among the 41.1 million shares worth $145.7m traded.

The standout performer on the day was logistics firm Mainfreight, which gained $6.84 or 12.4% to end at $62.01 after a positive earnings update.

According to news reports from Hong Kong, China was assessing proposals by the US to begin trade talks.

Late in the day, Australia’s ASX/S&P200 index was up by about 1% and futures market pricing suggested Wall Street’s S&P 500 would be in for an 80-point gain.

Cautious reaction

“We’re really careful about how to react to headlines in this environment because they’re all over the place, but reports are suggesting that China may respond to US overtures,” Salt Funds managing director Matt Goodson said.

“So that’s sort of a macro driver. Secondly, what we’re seeing in New Zealand is a typical start to the month with higher cash flows, which has become a bit of a pattern in recent times.

“The third and interesting company-specific thing is the Mainfreight update.”

Goodson noted Mainfreight had previously been weak on fears about how the company would be affected by higher trade tariffs.

However, in an update, the firm said it expected its profit before tax and sales revenues for the fiscal year 2025 to be above market consensus expectations of $375m and $5.1 billion, respectively.

“However, we are seeing a reduction in forward sea freight bookings for May on the Transpacific trade route, China to USA,” Mainfreight said.

For the 2024 year, Mainfreight reported pretax earnings of $395m, and revenue of $4.7b.

The company is due to report its results on May 29.

Goodson said Mainfreight’s update was taken as a “strong positive”.

“Looking forward, it’s more mixed.”

Auckland Airport strong

Auckland International Airport (AIA) was also strong, gaining 14.5c or 1.9% to $7.73.

“AIA has been very weak on regulatory fears, and it has been struggling to get back to pre-covid levels, so it’s just having a bit of a bounce,” Goodson said.

Despite challenging power generation conditions, Mercury NZ was firm, up 12c at $5.89 while Meridian gained 14c to $5.77.

Shares in Contact Energy were initially weaker but ended the day flat at $9.15, while those of its takeover target, Manawa, remained unchanged at $4.85.