by Paul McBeth
New Zealand’s S&P/NZX 50 index joined the rally across Asia after the recovery in chipmakers such as Intel and Nvidia on Wall Street overnight, while a calming of tensions between Israel and Iran took the heat out of oil prices, supporting the likes of the national carrier, Air New Zealand.
Infratil effectively gained after declining by less than the amount of its upcoming dividend as OpenAI rounded out the big three artificial intelligence pioneers set to go public in the US, while exporters such as Fisher & Paykel Healthcare remained well supported as the kiwi dollar nudged higher from its sharp decline.
The a2 Milk Co was at the bottom of the leaderboard, despite a strong pick-up in Chinese imports in May, while the electricity generator-retailers were mixed after energy minister Simeon Brown said they wouldn’t be able to levy customers to help pay for an LNG import facility to provide dry-year cover.
And Scott Technology hit a two-month high after the automation systems maker signed several new contracts across North America and Europe.
Buying the dip
The NZX50 jumped 165.84 points, or 1.3%, to 13,204.08, with 34 gainers, 12 decliners, and four stocks unchanged. The S&P/NZX 20 index futures contract for June rose 1.2% to 7,484, with 40 lots traded for a value of $298,000. The NZX20 gained 1% to 7,480.06.
Turnover across the main board was $175 million, of which Contact Energy accounted for $18.5 million as the power company nudged up 0.4% to $9.52.
New Zealand joined a rally across Asia, with South Korea’s Kospi surging 7.5% after Wall Street’s tech cohort bounced back from their Friday slump as Intel secured Alphabet’s Google with a major supply deal and Nvidia chief executive Jensen Huang shrugged off the rout as a buying opportunity.
Meanwhile, OpenAI confidentially filed for an initial public offering in the US, with SpaceX listing this week and Claude developer Anthropic lodging its papers last month, and Alphabet plans to raise US$84.75 billion to help fund its AI aspirations.
Japan’s Nikkei 225 rose 2.1% and Hong Kong’s Hang Seng increased 0.1%, while Australia’s S&P/ASX 200 index was down 0.2% in late trading as it returned from the long King’s Birthday weekend with the latest NAB business survey showing continued pessimism among firms across the Tasman.
“Despite the improvement, confidence remains 18 points below its long-run average – a deeply pessimistic level underscoring the ongoing impact of heightened uncertainty,” Westpac economist Luka Belobrajdic said in a note.
The kiwi dollar rose to 82.61 Australian cents at 5pm in Auckland from 82.36 cents yesterday, and gained to 58.29 US cents from 58.02 cents.
Brent crude oil futures fell 0.9% to US$93.40 a barrel as Iran and Israel agreed to stop firing missiles at each other, with the escalation threatening to derail the Islamic Republic’s peace talks with the US.
Air New Zealand led the NZX50 higher, climbing 6% to 44 cents, while logistics group Mainfreight advanced 4.8% to $65, and Auckland International Airport gained 2.1% to $8.29.
Foreign buyers
Exporters were broadly stronger, with the kiwi dollar still trading below 59 US cents. F&P Healthcare gained 2.8% to $38.30, Scales Corp advanced 4.7% to $6.08, Skellerup Holdings rose 1.9% to $5.98 and Fonterra Shareholders’ Fund units advanced 1.7% to $7.22.
Local software firms were mixed in the broader tech rally, with cinema analytics firm Vista Group International gaining 5.2% to $2.24 and travel software developer Serko advancing 1.4% to $1.50, while utilities software developer Gentrack slipped 0.3% to $3.97. Eroad fell 2.3% to $1.07 and Black Pearl Group slipped 0.8% to 63.5 cents.
Vulcan Steel extended its rally after reports that the government was probing imported aluminium extrusion products over safety concerns, increasing 5.4% to $6.30. Materials firm Fletcher Building gained 4.3% to $3.16, while Steel & Tube Holdings increased 1.3% to 38 cents.
Retailers were stronger after Westpac NZ card spending data showed a dip in spending last month, with economist Satish Ranchhod saying household expenditure had been tracking sideways since the start of the Middle East conflict.
KMD Brands rose 1.4% to 7.5 cents on a volume of 5.4 million shares – the most for the day – while Briscoe Group gained 0.9% to $4.55 and Hallenstein Glasson Holdings advanced 1.6% to $9.99.
The a2 Milk Co posted the steepest decline on the NZX50, falling 3.5% to $6.30, despite data showing Chinese imports grew more than expected last month.
Spark New Zealand dropped 2.6% to $1.85, snapping two days of gains, while Oceania Healthcare declined 2% to 73 cents.
Genesis Energy and Mercury NZ extended their decline after getting downgraded by Forsyth Barr analysts, falling 1.6% to $2.53 and 1.5% to $6.80 respectively. Meanwhile, Meridian Energy gained 0.5% to $5.80.
Energy minister Simeon Brown today reaffirmed the government’s plans to deliver a liquefied natural gas import terminal to provide back-up power, and said officials were working on funding, taking a levy on customers off the table.
Infratil fell 0.4%, or 6 cents, after shedding rights to an upcoming 13.65 cents per share dividend, while Argosy Property slipped 0.5%, or 0.5 of a cent, to $1.05 going ex-dividend on its 1.6625 cents return.
Outside the benchmark index, Scott Technology jumped 6.2% to $2.58 after signing $12 million of new contracts with customers in North America and Europe.
Paul is a staff writer for Good Returns based in Wellington.
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