New Zealand’s S&P/NZX 50 index dipped as a late rally for heavyweights Fisher & Paykel Healthcare and Auckland International Airport helped offset broad selling on the domestic stock market as rising bond yields continue to unnerve investors.

Meridian Energy and Infratil were the main drags on the local benchmark in a mixed day across Asia, as Australian energy and real estate stocks were knocked, while artificial intelligence-linked companies spurred gains in Japan and South Korea.

Heartland Group Holdings shareholders approved the $620 million merger of its banking unit with TSB Bank at yesterday’s special meeting, while companies exposed to the housing market were mixed after Statistics New Zealand figures showed new building consents remained firm.

And Southland Regional Council raised $30 million as it sold down its holding of South Port New Zealand while keeping a majority stake, while New Zealand King Salmon Investments’ biggest shareholder Oregon Group is set to regain control of the fish farmer if a purchase from a fellow substantial shareholder is approved.

Not so bad

The NZX 50 declined 23.88 points, or 0.2%, to 13,810.51, with 30 stocks falling, 13 gaining, and seven unchanged. The S&P/NZX 20 index slipped 0.1% to 7,576.92, while the December futures contract was untraded.

Turnover across the main board was $200.1 million, of which F&P Healthcare accounted for $37.9 million as the country’s biggest listed company rose 1% to $46.45 as its late rally, alongside a 0.5% increase for Auckland Airport to close at $8.42, helped limit the daily decline.

The NZX 50 had been sliding in sympathy with Australia’s benchmark, with the S&P/ASX 200 index down 2% in late trading as bonds continued to decline, with the yield on New Zealand’s 10-year government bond rising 5 basis points to 5.1% at 5pm in Auckland, while the Australian equivalent was up 5 basis points at 5.39%.

“A tug-of-war is underway between central banks and bond markets,” Moomoo market analyst Tina Teng said in a note. “For Kiwi and trans-Tasman equities, generation-high borrowing costs and sticky commodity prices pose a clear headwind for valuations.”

Meanwhile, Japan’s Nikkei 225 jumped 2.7% and South Korea’s Kospi advanced 1.3% in late trading, with chip companies buoyed by a strong quarterly result by memory chipmaker Micron Technology.

Plugging in

That didn’t extend to local data centre investor Infratil, which fell 1.5% to $13.95, and was one of the major drags on the NZX 50. Meanwhile, the yield on Infratil’s 2032 bond jumped 82 basis points to 6.39%, its highest level since the notes – which pay a coupon of 6.16% – were listed in June last year.

Meridian was also a weight on the bourse, falling 1.6% to $5.40, while Genesis Energy declined 1.6% to $2.48. Mercury NZ rose 0.6% to $6.92 and Contact Energy increased 0.5% to $8.61.

Napier Port Holdings posted the steepest decline on the day, down 2.7% at $3.60, while Skellerup Holdings – which shed rights to a 20 cents per share dividend – fell 2.6%, or 21 cents, to $7.77.

Building materials firms and retirement villages were mixed after Stats NZ’s latest building consents data showed new residential permits were up 21% in the 12 months ended Aug 31.

Satish Ranchhod, a senior economist at Westpac NZ, said annual issuance was at the highest level since 2023, with the monthly trend starting to show signs of flattening.

“More generally, the rise in interest rates, the related softness in the housing market, and a pickup in building costs signal increasing headwinds for the residential construction sector over the coming year,” Ranchhod said in a note.

Vulcan Steel rose 0.4%, or 3 cents, to $6.85, even as it went ex-dividend on an upcoming payment of 4.5 cents per share, while Fletcher Building advanced 0.3% to $3.55.

Retirement village operator Ryman Healthcare slipped 1.1% to $1.83 and Summerset Group Holdings declined 0.8% to $7.40.

Port of Tauranga posted the biggest gain on the day, up 1.6% at $8.42, while Vista Group International advanced 1.1% to $2.83.

Exporters were mixed as the kiwi dollar fell to its lowest level since November against the greenback, trading at 56.27 US cents at 5pm from 56.44 cents yesterday. Fonterra Shareholders’ Fund units increased 0.3% to $8.83 and logistics group Mainfreight advanced 0.7% to $65.90, while Sanford declined 1.6% to $6.59 and Scales Corp fell 2% to $6.73.

Heartland Group Holdings was unchanged at $1.28 after the financial services firm’s shareholders approved the $620 million merger of its bank with TSB Bank. The yield on Heartland Bank’s 2033 notes rose 23 basis points to 6.18%, their highest level since July last year.

Outside the benchmark index, South Port declined 0.7% to $8.53 in the heaviest volume for the day, with almost 3.8 million shares changing hands. Southland Regional Council sold down its stake in the nation’s southernmost port to 52%, tapping Jarden to run a partially underwritten sale at $8 a share for up to 4.1 million shares.

Meanwhile, New Zealand King Salmon was unchanged at 23.5 cents after shareholder China Resources Asset Management conditionally agreed to sell its 9.9% stake to Oregon Group and Porus Holdings Trust at 22.5 cents a share. The transaction would ultimately give Oregon a controlling stake in the fish farmer, and needs shareholder approval at a special meeting.

Booster Innovation Fund advanced 1.3% to $1.52 after fund manager Booster Investment Management committed a further $7.4 million to the early-stage investor.

Reporting by Paul McBeth.