by Paul McBeth
New Zealand’s S&P/NZX 50 index joined a muted day across Asia as US President Donald Trump’s resumption of a naval blockade on the Strait of Hormuz sent oil prices higher, knocking local heavyweights including Auckland International Airport and Meridian Energy.
The kiwi dollar climbed after Reserve Bank chief economist Paul Conway noted the revived conflict in the Middle East created upside risks for the central bank’s inflation forecast, while the New Zealand Institute of Economic Research’s latest business confidence survey showed a recovery in sentiment before the latest ratcheting up of tensions.
Despite the declines among larger companies, more firms rallied on the day, with Skellerup Holdings touching a record as it raised its earnings guidance and Ryman Healthcare advancing on increased resales of occupation rights in the June quarter.
And commerce minister Cameron Brewer unveiled the next round of capital markets reform, seeking feedback on a range of measures aimed at cutting the cost of capital.
Concentrated declines
The NZX 50 dropped 71.99 points, or 0.5%, to 13,651.22, with 13 stocks declining, 30 gaining and seven unchanged. The S&P/NZX 20 index futures contract for September fell 0.6% to 7,701 with 190 lots traded for a value of $1.5 million, while the NZX 20 sank 0.8% to 7,715.05.
Turnover across the main board was $115.5 million, of which Contact Energy accounted for $15.5 million as it fell 0.9% to $9.08.
Stock markets across Asia were generally weaker as the resumption of a US naval blockade on the Strait of Hormuz and a fresh wave of attacks on Iran sent oil prices higher, with Brent crude futures up 1.9% at US$84.92 a barrel at 5pm in Auckland. Australia’s S&P/ASX 200 index dipped 0.2% in late trading, while Hong Kong’s Hang Seng was marginally weaker and South Korea’s Kospi dipped 0.2%.
“It’s been a sluggish day in our market today with Trump deciding he’s going to go back to war again,” said Peter McIntyre, an investment adviser at Craigs Investment Partners. “It’s the top 10 that are holding our whole index down today.”
Auckland Airport fell 3.3% to $8.53, Fisher & Paykel Healthcare declined 0.4% to $39.75, Infratil decreased 1.9% to $15.18 and Meridian slipped 1.6% to $5.58.
Serko posted the steepest drop on the day, down 4.1% at $1.39.
Not one-way traffic
Still, there were more stocks on the green side of the ledger, with Skellerup posting the biggest gain on the day, up 5.7% at $6.89 and hitting an all-time high during the day. The rubber goods maker said it would report a bigger increase in annual profit than previously forecast with strong demand in the US.
Ryman gained 0.9% to $2.14 after reporting a 7% lift in June quarter resales of occupation rights.
Among other gainers, Vista Group International advanced 2.6% to $2.41 and Scales Corp increased 1.8% to $6.75.
SkyCity Entertainment Group was the most heavily traded stock on the day with a volume of 2 million shares as it ended the session unchanged at 51 cents.
Stock market operator NZX was unchanged at $1.49 after commerce minister Brewer outlined the latest capital market reforms aimed at bringing down the cost of capital and removing obstacles to new companies listing.
Outside the benchmark, Green Cross Health slipped 0.8% to $1.95 after shareholders approved the $270 million sale of its medical division to Tend Health. Chair Kim Ellis said the board was still working out how to distribute the gains to shareholders.
Pacific Edge was unchanged at 27.5 cents after the bladder cancer test maker said Asia Pacific commercial tests rose 12% in the June quarter, helping shrink that region’s cash burn.
The kiwi dollar rose to 57.89 US cents at 5pm in Auckland from 57.58 cents yesterday after the Reserve Bank’s chief economist Conway noted the increased risks to inflation from the renewed tensions in the Middle East.
Separately, the NZIER’s quarterly survey of business opinion showed a recovery in confidence among business owners – albeit before the latest flareup and oil price spike – while Statistics New Zealand figures showed slowing net migration in May and a monthly dip in tourist numbers.
Paul is a staff writer for Good Returns based in Wellington.
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