by Paul McBeth
Mainfreight hit a six-month high. (Image: Supplied)
New Zealand’s S&P/NZX 50 index joined a global rout as the Federal Reserve kept investors focused on rising long-term interest rates, while the renewed conflict in the Middle East threatened to fuel inflation.
Infratil was among the main drags on the local bourse as results from Magnificent 7 alumni Microsoft and Meta Platforms kept cash flow in focus for the artificial intelligence infrastructure spending, while South Korea’s Samsung Electronics advanced amid surging demand for its memory chips.
Across the Tasman, Jamie Beaton’s Crimson Education lobbed in a A$38.6 million bid at a 62% premium for Aussie tutoring firm Kip McGrath, which counts local fund manager Pie Funds Management as its biggest shareholder.
And Mainfreight hit a six-month high after telling shareholders group revenue and earnings were bouncing back from the previous tough period.
A sea of red
The NZX 50 dropped the most in a day since May as it sank 213.89 points, or 1.5%, to 13,762.78, with 37 stocks declining, 11 gaining, and two unchanged. The S&P/NZX 20 index futures contract for September was untraded, while the NZX 20 dropped 1.7% to 7,771.89.
Turnover across the main board was $129.9 million, of which Fisher & Paykel Healthcare accounted for $13.3 million as it declined 2.4% to $40.77.
Stocks markets across Asia were broadly weaker, following Wall Street’s cue after the Fed’s decision to keep the federal funds rate in a range of 3.5%-to-3.75% and chair Kevin Warsh’s comments that the rising yield of the US 30-year bond was among the most significant of the past 20 years.
“That matters because higher bond yields raise the cost of capital and reduce the present value of future earnings,” Moomoo market strategy consultant Greg Boland said in a note. “Today's late sell-off was a reminder that, while earnings remain strong, the bond market is still setting the direction for equities.”
Meanwhile, oil prices remained elevated as the US launched a new wave of attacks on Iran, with Brent crude futures for September slipping 1.2% to US$89.72 a barrel at 5pm in Auckland.
That flowed across most of Asia, with Australia’s S&P/ASX 200 index down 1% in late trading, while Hong Kong’s Hang Seng slipped 0.5% and South Korea’s Kospi dropped 1.2%. Japan’s Nikkei 225 was one of the few standouts, rising 0.2%.
Jeremy Sullivan, an investment adviser at Hamilton Hindin Greene, said there might have been some profit-taking after the NZX 50 hit an all-time high this week in an increasingly volatile environment.
“US markets were weaker, oil prices are tracking up a little as the Americans and Iranians launch missiles at each other," Sullivan said. The federal open market committee “stayed on hold but the 30-year tracked up with the market seeing a little bit of inflation on the radar.”
Infratil was one of the major drags on the local bourse, falling 3.9% to $14.75, its lowest close in almost three months, as investors remained uneasy about the AI trade after Meta missed earnings expectations, while Microsoft and Samsung impressed. Goodman New Zealand slipped 1.9% to $2.05.
The slow recovery
Retirement village operators were broadly weaker after ANZ economists reaffirmed their forecast for house prices to fall 2% this year, and pencilled in a modest increase for 2027. Ryman Healthcare fell 4.4% to $2.19, while Summerset Group Holdings declined 3% to $8.32.
Vulcan Steel posted the biggest decline on the NZX 50, falling 6.1% to $6.20, while Fletcher Building dropped 3.4%.
Oceania Healthcare was unchanged at 74 cents after shareholders turned down a resolution to commission a strategic review to bridge the gap between the share price and net tangible assets, put forward by activist Tommy Scrivener at today’s annual meeting. Chair Liz Coutts and director Sarah Ottrey were elected to the board with protest votes against of 11% and 9% respectively.
Mainfreight surged 8.2% to $69, its highest since January, after the logistics group told shareholders at today’s annual meeting that group revenue was up 18% and earnings rose 6.5% in the first 16 weeks of the March 2027 financial year.
Serko gained 5.4% to $1.455, extending its rally after an upbeat trading update yesterday, while Westpac Banking Corp advanced 2.3%.
Freightways slipped 1.5% to $13.85 as Mark Cairns handed over the chair of the courier operator to David Gibson, effective today, having previously signalled his intention to retire from the board.
Across the Tasman, Kip McGrath surged 53% to 69 Australian cents after Crimson lobbed in a takeover bid at 73 cents per share, having locked in Pie Funds’ 19% stake with a pre-bid acceptance. Kip McGrath’s board said it was reviewing the offer and recommended shareholders take no action.
The kiwi dollar traded at 58.06 US cents at 5pm from 57.87 cents yesterday.
ANZ’s monthly business outlook survey showed growing optimism among firms’ expectations for the economy and their own activity, while also paring back their inflation expectations.
Paul is a staff writer for Good Returns based in Wellington.
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