NZX50 sinks 2.1% this week as inflation creep starts to weigh
The a2 Milk Co’s profit warning triggered its worst week since May 2021.
Friday, April 17th 2026, 7:00PM
by Paul McBeth
New Zealand’s S&P/NZX 50 index dropped 2.1% this week as the impact of the global energy shock starts fuelling fears the Reserve Bank will hike interest rates as early as July, with a2 Milk Co feeling it most keenly in its worst week since May 2021 after cutting its earnings outlook.
The local benchmark closed Friday on a down note in a wide-ranging selloff, with power companies the biggest drag after Meridian Energy said the dams were flush with water and falling forward prices were a sign of the deep investment in new renewable generation.
Channel Infrastructure dipped on speculation it’s contemplating a bid for Exxon Mobil’s New Zealand chain of petrol stations, while New Zealand King Salmon Investments surged on an upgraded earnings outlook.
And Fletcher Building declined after Forsyth Barr analysts trimmed their target price on the materials firm, while upgrading it to an ‘outperform’ after its sharp decline in March.
Friday blues
The NZX50 dropped 160.39 points, or 1.2%, to 12,905.67 on Friday, with 37 stocks declining, six gaining, and seven unchanged. Turnover across the main board was $157.4 million, of which Auckland International Airport accounted for $17.3 million as it ended the session unchanged at $8.18.
The weekly decline was the benchmark’s sixth in the past seven weeks, and led by a2 Milk’s 19% slump to close Friday at $9.11, after the infant formula firm downgraded its profit outlook on supply issues and slower Chinese customs checks.
Retailer KMD Brands dropped 8.3%, or 0.6 of a cent, to 6.6 cents in the week, and Vulcan Steel dropped 8.1% to $6.25.
“The economic reality of higher inflation and higher oil prices is starting to potentially weigh on sentiment,” said Jeremy Sullivan, an investment adviser at Hamilton Hindin Greene.
Economists have started pricing in earlier and more aggressive rate hikes by the Reserve Bank as the prospect of elevated oil prices for a protracted period threaten to fuel inflation more broadly. Statistics New Zealand figures today showed petrol chewed up a greater proportion of people’s spending on credit and debit cards in March.
The kiwi dollar fell to 58.88 US cents at 5pm in Auckland from 59.14 cents yesterday.
The NZX’s decline on Friday joined a largely subdued session across Asia, with Australia’s S&P/ASX 200 index down 0.2% in last trading, while Japan’s Nikkei 225 slipped 1% and Hong Kong’s Hang Seng dropped 1.3%.
The local energy sector was the biggest drag on the NZX50, with Meridian falling 3% to $5.54 after the country’s biggest electricity generator said national hydro storage remained near historical averages, while forward prices continued to ease.
Mercury NZ declined 2.1% to $6.55, Contact Energy shed 1.7% to $9.33 and Genesis Energy dropped 1.8% to $2.25.
Heavyweight softness
Fisher & Paykel healthcare declined 1.4% to $38.03 and Infratil was down 1.1% at $12.05.
Air New Zealand posted the sharpest decline on the day, down 4.4% at 44 cents, with Brent crude oil futures still elevated at US$98.10 a barrel at 5pm in Auckland.
Fletcher Building fell 3% to $2.87 after Forsyth Barr analysts said the stock’s recent weakness presented an attractive buying opportunity, lifting their rating to ‘outperform’, while also cutting the target price by 35 cents to $3.80.
Meanwhile, Channel Infrastructure dipped 0.7% to $2.95 after declining to comment on reports in The Australian newspaper’s DataRoom column that it’s a potential buyer of the Mobil NZ petrol stations up for sale.
Sky Network Television dropped 2.5% to $3.12 after streaming giant Netflix trimmed its forecast operating margins for the second quarter, after reporting an 83% increase in March quarter earnings.
Rubber goods maker Skellerup Holdings posted the biggest gain on the benchmark index, up 1.8% at $5.66, while Vista Group International rose 1.7% to $1.80 after Paramount Skydance chief David Ellison told US theatre operators his firm would commit to at least 30 movie releases a year if it completes its merger with Warner Bros Discovery.
Spark New Zealand was the most heavily traded stock on the day with a volume of 2.9 million shares, ending the day unchanged at $2.10.
Outside the benchmark index, NZ King Salmon touched an 11-month high as it surged 20% to 24 cents after upgrading its earnings outlook on a strong summer harvest.
Paul is a staff writer for Good Returns based in Wellington.
| « NZX50 joins ASX200 lower as refinery fire weighs |
Special Offers
Comments from our readers
No comments yet
Sign In to add your comment
|
|
Printable version |
|
Email to a friend |
