by Paul McBeth
New Zealand’s S&P/NZX 50 index snapped a four-day rally on Friday to end the week up 2.2%, with investors waiting for the substantial US-Iran peace talks to begin this weekend as President Donald Trump attempts to keep Israel’s attacks on Lebanon from derailing the ceasefire.
The local benchmark was one of the weaker markets during the Asian trading session on Friday, with Gentrack leading the NZX50 lower amid the renewed scepticism about the business models of software-as-a-service companies, while heavyweight Fisher & Paykel Healthcare was a drag on the day.
News flow was light ahead of US corporate earnings season, with Goldman Sachs kicking off the bank reporting on Monday, while the latest Bank of New Zealand-BusinessNZ performance of manufacturing index showed industrial activity kept expanding in March, albeit at a slower pace.
And Michael Hill International dipped in its heaviest day of trading since September 2020.
Uncertain outcomes
The NZX50 fell 92.37 points, or 0.7%, to 13,181.44, with 27 stocks declining, 12 gaining, 10 unchanged and Fonterra Shareholders’ Fund units in a trading halt for its capital return. Turnover across the main board was $129.1 million, of which Auckland International Airport accounted for $22.2 million as it slipped 0.4% to $8.25.
The benchmark ended the week up 2.2%, ending a run of five weekly declines, as the truce between the US and Iran took the heat out of elevated oil prices.
Still, optimism about the permanence of the ceasefire remains muted with US vice president JD Vance leading formal peace negotiations in Pakistan this weekend, while President Trump seeks to curb Israeli strikes on Hezbollah targets in Lebanon for fear of shattering the fragile calm.
“Until this is negotiated, we’re going to have volatility and uncertainty in the market,” said Peter McIntyre, an investment adviser at Craigs Investment Partners. “There might be a bit of profit taking before the weekend.”
Vista Group International posted the strongest weekly gain, up 9.5% to close Friday at $1.795, after Forsyth Barr analysts raised their target price on the cinema analytics firm’s target price, while Westpac Banking Corp rose 8.6% to $52.35 and Tourism Holdings advanced 8.6% to $2.28.
KMD Brands posted the sharpest decline across the week, falling 18% to 7.2 cents, holding above the 6 cents offer price in its steeply discounted capital raising to rein in debt.
Domestic softness
New Zealand’s benchmark was one of the softest markets across Asia, with Australia’s S&P/ASX 200 index down 0.3% in late trading on Friday, while Japan’s Nikkei 225 climbed 1.9% and Hong Kong’s Hang Seng advanced 0.7%. South Korea’s central bank was the latest to keep rates as policymakers weighed up in the impact of the Iran conflict.
F&P Healthcare was the biggest drag on the index, falling 2% to $38.54, with exporters mixed after the kiwi dollar’s rally in recent days – the local currency traded at 58.47 US cents at 5pm in Auckland from 58.34 cents yesterday, and is heading for a 2.7% gain this week against the greenback.
The a2 Milk Co declined 1.2% to $11.21 and rubber goods maker Skellerup Holdings slipped 0.4% to $5.61, while Sanford advanced 1.1% to $7.58.
Gentrack led the NZX50 lower, falling 4.6% to $6.20, joining a broader selloff of software companies amid renewed fears that artificial intelligence products will undermine those firms’ business models. Serko fell 1.4% to $1.825, while Vista bucked the trend, ending the day up 0.8%.
Fletcher Building slipped 2.9% to $2.98 after the BNZ-BusinessNZ PMI showed manufacturing activity grew at a slower pace in March, with comments in the survey showing the impacts of the Middle East conflict weighed on respondents’ minds.
Vulcan Steel slipped 0.7% to $6.80.
Port of Tauranga posted the biggest gain on the day, up 2.8% at $8.02, while Westpac gained 2.1%.
KMD Brands was the most traded stock on the NZX50 with a volume of 3.6 million as it ended the day unchanged.
Outside the benchmark index, Michael Hill fell 2.2% to 44 cents on a volume of 7.1 million shares, its biggest one-day trading volume since September 2020. Of that, almost 7 million shares changed hands in one trade at 39.9 cents each.
Pacific Edge slipped 1.5% to 19.2 cents after the bladder cancer test maker said lab throughput rose 2.7% in the March quarter, and that shrinking its team to preserve cash had held back sales.
Paysauce was unchanged at 26 cents after reporting a 6% increase in annual recurring revenue in the March quarter.
Paul is a staff writer for Good Returns based in Wellington.
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