by Paul McBeth
New Zealand’s S&P/NZX 50 index inched higher in a mixed day across Asia as the tech rout on Wall Street knocked the likes of Japan’s SoftBank and South Korea’s Samsung Electronics, while Chinese markets rallied as two major state funds lifted their holdings of domestic equities.
Local travel companies shrugged off the prospect of higher fuel costs as Auckland International Airport and Air New Zealand advanced, despite Brent crude oil prices rising to their highest level in more than a month amid escalating hostilities between the US and Iran.
SkyCity Entertainment Group rose for a fourth session after Forsyth Barr analysts raised their target price on the casino operator after last week’s asset sales.
Meanwhile, Fletcher Building was unchanged after securing a government loan to keep its domestic cement manufacturing running until 2040.
Treading water
The NZX 50 increased 1.35 points to 13,696.03, with 19 stocks gaining, 27 declining and four unchanged. The S&P/NZX 20 index futures contract for September rose 0.1% to 7,693, with 270 lots traded for a value of $2.1 million, while the NZX 20 advanced 0.1% to 7,740.97.
Turnover across the main board was a relatively quiet $94 million, of which Auckland Airport accounted for almost $13 million as the national gateway gained 1.3% to $8.61.
Local trading wavered between gains and losses in a mixed day across Asia, where Japan’s Nikkei 225 dropped 4% and South Korea’s Kospi fell 3.6%, following Wall Street’s decline on Friday as the emergence of a new large language model from Chinese artificial intelligence startup Moonshot AI renewed fears about the pace of spending on AI infrastructure.
Meanwhile, Hong Kong’s Hang Seng climbed 2.2% and China’s Shanghai Composite advanced 1% as state funds China Reform Holdings and China Chengtong Holdings disclosed they’d been buying Chinese equities for the first time since US President Donald Trump embarked on his tariff programme last year.
Australia’s S&P/ASX 200 index nudged up 0.2%, with energy companies buoyed by the higher oil price as Brent crude futures rose 2.4% to US$90.19 a barrel on the escalating conflict in the Middle East.
Air New Zealand rose 2.4% to 42.5 cents despite the rising oil price, outperforming ASX-listed Qantas Airways and Virgin Australia, which fell 1.6% and 2.1% in late trading respectively.
Growing confidence
SkyCity led the local market higher, climbing 3.5% to 59 cents after Forsyth Barr analysts Paul Laxton Koraua and Andy Bowley raised their target price on the casino operator by 5 cents to 97 cents, retaining their ‘outperform’ rating. The analysts said the company’s recent asset sales eased concerns about the execution of the programme to reduce SkyCity’s debt.
“With progress on asset sales and a heads of agreement reached on the Adelaide fine, the overhangs that have weighed on investor sentiment should begin to ease,” the analysts said in a note to clients.
The a2 Milk Co gained 2.4% to $8.57 after Statistics New Zealand figures showed infant formula exports surged 181% to $396 million in June from a year earlier.
Vista Group International advanced 1.2% to $2.48 after appointing former media exec Lauren Quaintance to the board. Separately, Universal Pictures’ ‘The Odyssey’ had the third strongest US debut this year as it took in US$124.5 million in its opening weekend, for a global box office of US$264.1 million.
Vital Healthcare Property Trust increased 0.8% to $1.905 after the medical property investor said it expected to report a $10 million uplift in its $3.4 billion property portfolio, with rental increases offset by softer capitalisation rates.
Commercial landlords typically held for their reliable dividends shrugged off increased swap rates, with Precinct Properties NZ up 2.8% at $1.085 and Stride Property Group advancing 1.7% to $1.22, while Kiwi Property Group gained 1.6% to 96.5 cents.
Meanwhile, retirement village operators – often tied to the housing market – were broadly weaker with Oceania Healthcare posting the steepest decline on the NZX 50, falling 2.7% to 73.5 cents, while Ryman Healthcare slipped 1.4% to $2.20 and Summerset Group Holdings decreased 1.2% to $8.05.
Infratil declined 1.2% to $15.14 and Fisher & Paykel Healthcare decreased 0.6% to $39.70.
Fletcher was unchanged at $3.75 after the building products maker said it would receive up to $60 million from the government to keep domestic manufacturing at its Golden Bay Cement operation in Northland. Fletcher committed to keeping the operation until at least 2040, and investing $150 million over that period.
Outside the benchmark index, Comvita fell 4.1% to 70 cents after appointing Oravida’s Julia Xi and former a2 Milk exec Peter Nathan to its board as non-executive directors, representing Kauri NZ and PHC Investments. The honey products firm also hired former Livestock Improvement Corp general manager Emma Blott as chief commercial officer.
Accordant Group increased 0.6% to 16.2 cents. After trading closed, the recruitment company said independent directors Nick Simcock and Bella Takiari-Brame resigned effective immediately after the company’s recent capital raising. Accordant said it would operate a more streamlined governance and wouldn’t replace the directors at this time.
The kiwi dollar traded at 58.48 US cents at 5pm in Auckland from 58.43 cents last week, tracking swap rates higher ahead of Stats NZ’s June quarter consumers price index, which was expected to show an accelerating pace of inflation.
Bloomberg reported leveraged funds’ net short positions in the local currency were at their highest level since the Commodity Futures Trading Commission started collecting the data in 2006, while asset managers remained bearish New Zealand’s currency.
Paul is a staff writer for Good Returns based in Wellington.
| « NZX 50 snaps two weeks of gains as Middle East conflict casts a chill | NZX 50 falls as accelerating inflation keeps focus on oil prices » |
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