New Zealand’s S&P/NZX 50 index missed a global rally on hopes that a ceasefire is on the way in the Middle East, with US President Donald Trump scheduled to deliver a speech about the operation in Iran on Thursday.
Meridian Energy and Infratil were the major drags on the local market as they gave back some of Tuesday’s gains, while property and energy stocks were broadly weaker.
Interest-rate sensitive tech stocks Serko and Gentrack were among the day’s biggest gainers, as government bond yields eased with economists holding their projections for the Reserve Bank to keep any interest rate hikes up its sleeve until the end of the year.
Meanwhile, Fletcher Building ended the day unchanged on an unusually large volume, after Statistics New Zealand figures showed residential building consents continued to grow through February, before the Middle East conflict exploded.
A new dawn
The NZX50 dropped 86.24 points, or 0.6%, to 12,825.87, with 22 stocks declining, 22 gaining, four unchanged and two in a trading halt. Turnover across the main board was $143.5 million, of which Fletcher Building accounted for $16.2 million as it ended the day unchanged at $2.95.
New Zealand was a laggard across Asia as investors were buoyed by the prospect of a ceasefire being called in the Middle East, with US President Trump telling reporters he expects the war will end in the next two or three weeks and scheduling a national address on Wednesday night in Washington – which will be 2pm on Thursday locally.
Australia’s S&P/ASX 200 index climbed 2% in late trading and Japan’s Nikkei 225 surged 4.3%, while Hong Kong’s Hang Seng advanced 2%.
Still, the Polymarket prediction market is pricing a 37% chance of a ceasefire by the end of the month, and Brent crude oil futures were up 1.5% at US$105.42 a barrel at 5pm in Auckland.
And across the Tasman, Australian prime minister Anthony Albanese is due to deliver a speech which is expected to announce fuel restrictions after Easter. New Zealand’s latest update showed a dip in petrol, diesel and jet fuel stocks onshore and offshore, although the Ministry of Business, Innovation and Employment said fuel continues to flow normally into the country.
“Markets are still trading on headlines, oil prices are still elevated and it might be a relief rally – things can change pretty quickly,” said Jeremy Sullivan, an investment adviser at Hamilton Hindin Greene.
The NZX50 was dragged down by heavyweights Infratil and Meridian as they gave back some of Tuesday’s gains, falling 3% to $11.30 and 2% to $5.42 respectively, while a2 Milk Co dropped 3.5% to $11.15.
Subdued staples
Property and energy stocks were broadly weaker, with Mercury NZ down 0.8% at $6.19 and Contact Energy declining 0.3% to $9.22, while Property for Industry fell 3.1% to $2.16, Kiwi Property Group slid 2.2% to 89 cents, and Argosy Property declined 1.8% to $1.11.
Tourism Holdings posted the steepest decline on the NZX50, falling 3.7% to $2.10.
Interest rate-sensitive tech stocks were at the top of the leaderboard as the yield on 10-year government bonds fell 12 basis points to 4.61%.
Serko gained 3% to $1.70 and Gentrack advanced 2.4% to $6.78, while Vista Group International nudged up 0.3% to $1.695.
Freightways, often seen as a barometer for the economy, gained 2.8% to $12.34, while logistics group Mainfreight advanced 1.1% to $58.40.
The kiwi dollar held overnight gains, trading at 57.33 US cents at 5pm in Auckland from 57.17 cents yesterday as ASB economists predicted the Reserve Bank will keep the official cash rate at 2.25% next week, and kept their forecast for a hike at the end of the year.
Separately, Stats NZ figures showed new residential building permits rose 2.7% in February, with the lift centred in Auckland.
Retirement village operators, typically linked to the housing market, were mixed. Ryman Healthcare fell 2.4% to $2.07 and Summerset Group Holdings increased 0.3% to $8.91, while agedcare operator Oceania Healthcare was unchanged at 70 cents.
Outside the benchmark index, Radius Residential Care gained 2.7% to 37.5 cents after agreeing to buy a care home in Wellington for $13.6 million.
And Santana Minerals rose 2.4% to 85 cents after Forsyth Barr analysts started coverage of the would-be miner, putting a target price of $1.35 on the stock and giving it an ‘outperform’ rating.
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