Lower bond yields lift NZ sharemarket

The S&P/NZX 50 Index ended 137.58 points or 1.1% higher at 12,481.89, with 77.4 million shares, worth $426.42m in trading.

There were 75 gainers and 65 decliners on the main board.

“Overnight, we saw some weak economic data coming out of the US, which led to the US 10-year and longer-term bond yields falling,” Harbour Asset Management portfolio manager Shane Solly said.

“Our bond yields have fallen as well, and I think that’s been helpful for our market.

“With ongoing US tariff uncertainty and signs of a weakening US economy, the market is starting to ask if the US Federal Reserve may cut interest rates again.”

Local market

The local market was absorbing the latest batch of earnings reports from some of the bigger names: Fisher and Paykel Healthcare (up $1.89 or 5.4% at $36.50) and Mainfreight (up $3.30 or 4.8% at $70.30).

Brokers Forsyth Barr, in noting Mainfeight’s pre-tax profit had fallen by 3%, said the seasonally stronger second half showed sequential improvement, paving the way for earnings growth in 2026.

“We believe Mainfreight’s earnings cycle has now troughed, with scope for growth to accelerate over the next 18 months – return to trend-level growth in 2027,“ it said.

Sign of weaker economy

Solly said it had been a cautious earnings season, overlaid with tariff concerns and signs of a weaker NZ economy.

“After the frenzy that was the result season over the last two days, people have had time to go back and understand more about the quality of the results, and that’s probably been the thing that’s been showing through,” he said.

“It may not have been the results season that people wanted, but it’s probably enough that the market needs in terms of seeing the base earnings quality.”

Strong finish

Some other big-cap stocks also had a strong finish. a2 Milk gained 17c or 1.95% to $8.88, and The Warehouse firmed 9c (10.5%) to close at 95c.

Cinema software company Vista closed on 24c, or 7% higher at $3.69.

Solly linked Vista’s gain to strong box office performances for the movies, Mission: Impossible and Lilo and Stitch.

Ryman drops

On the downside, the newly recapitalised Ryman Healthcare dropped by 12c, or 5.4%, to $2.10.

The retirement village company this week reported an annual net loss of $436.8m from a restated loss of $169.7m a year earlier.

In the small-cap stocks, gold explorer New Talisman gained 0.8c or 12% to 7.5c after reporting an annual net profit of $4.04m from a $1.8m loss in the previous year.

The company said it had taken significant steps towards becoming an exploring producer, having secured, relocated and assembled a production plant ready to process ore.

Trading halt for Pacific Edge

Cancer diagnostics company Pacific Edge went into a trading halt while it conducted a $20m capital raise, in part to allow it to operate for a year without United States Medicare reimbursement of its tests.

Pacific Edge is offering $15m of new ordinary shares to selected investors and $5m of new ordinary shares to its existing retail investors.

Trading is expected to resume on June 3.