New Zealand shares declined, bucking the trend in other markets with concerns about AI stocks still dominating the global stage.

Salt Funds Management’s Matt Goodson said the US market ended up better than the futures market had been indicating, and that had set the tone for the day.

The worries about AI had been centred on US cloud computing company CoreWeave with investors concerned about its over-indebtedness, but the shares rebounded to end Thursday’s US session up nearly 6% after a 15.5% plunge in the Wednesday session.

Goodson said market pricing of CoreWeave’s debt put the yield at 15% and suggested there’s a 60% chance it will go out of business in the next few years.

The benchmark S&P/NZX 50 Index fell 79.07 points, or 0.57%, to 13,753.73, with 41 stocks declining and 38 gaining, while the S&P/NZX 20 futures index fell 50.81 points, or 0.67%, to 7520.26.

Turnover was almost $168 million with 48.6 million shares changing hands.

As the NZ market closed, the S&P/ASX 200 Index was up nearly 1%, Hong Kong’s Hang Seng Index was up 1.35% and Japan’s Nikkei was up 1.75%.

Infratil is the NZX-listed company with the biggest exposure to AI, even though it is indirect through its near 50% ownership of CDC Data Centres.

Its shares fell 7 cents to $12.88 today and have fallen more than 2.4% through this week.

Investment director at Craigs Investment Partners Mark Lister said Infratil “isn’t just a data centre story, although that’s obviously a dominant part of their portfolio, and they’re not at the pointy end of the AI trade.”

CDC accounts for about 40% of Infratil’s portfolio. “Infratil has held up better than most,” Lister said.

The Philly Semiconductor Index, which tracks 30 major stocks in the sector, has fallen about 9% so far this week, while Korea’s Kospi Index, which includes Samsung and SK Hynix, was down about 13% for the week shortly after the New Zealand market closed.

In its latest investor newsletter published today, Infratil reiterated a highlight of its investor day: “Although higher interest rates were likely to be a headwind for valuations in the near term, we see further upside from our portfolio exposure to global AI demand.”

The company said it hadn’t anticipated the volatility in markets in recent weeks, “but our core thesis remains the same. AI-driven demand is creating supply bottlenecks across electricy infrastructure and data centres.”

Infratil also owns 42% of US-based renewable energy developer and manager Longroad Energy and also owns startup renewable electricity companies in Asia and Europe.

Among other local stocks, Fletcher Building shares fell 8c, or 2.44%, to $3.20.

Investors are concerned about the weakness in Fletcher’s house sales after the company said on Wednesday that September quarter settlements were down 38.6% from the same quarter last year and down 75.5% from the June quarter.

The latest Real Estate Institute data showed its national house price index fell 1.5% in the year ended September and is down 17% from the November 2021 peak.

Contact Energy was down 19c, or 2.16%, to $8.62 on the news that it was coming out of the iShares Global Clean Energy Index at the close of business today.

Goodson said the removal was announced last week and that an estimated 3.5 million to four million shares would be affected.

Auckland International Airport shares were also weak, falling 10c, or 1.21%, to $8.17.

Goodson said it’s thought the Commerce Commission is relooking at the principles behind its calculations of the airport’s regulated asset base and that previous estimates had been “overly generous.”

Negative sentiment about the housing market has also been weighing on retirement village stocks, but both Ryman Healthcare and Summerset shares rebounded today.

Ryman shares gained 4c, or 2.23%, to $1.83 while Summerset shares rose 15c, or 2.22%, to $6.90. The retirement village operator has been suffering negative sentiment after its September quarter sales of new units disappointed investors.

Summerset’s new sales settlements were down 28% compared with the same quarter last year, which had been a record.

Forsyth Barr analyst Will Twiss said although Summerset had flagged a weaker quarter, the decline was larger than he had expected.

Goodson said investors are also worried about the likely policy of whichever parties form the next government that would require retirement villages to refund occupation rights agreements (ORAs) within a set period of the resident departing.

The ruling National Party is proposing ORAs should be repaid within nine months, less that the year a task force recommended, while Labour Party policy is for a much shorter 90 days.

“That could really affect their working capital positions,” Goodson said.

Another stock to buck the trend was SkyCity, which gained 2c, or 3.03%, to 68 cents after news that it has sold The Grand Hotel to a privately-owned property investor called Eden Global Capital for $221 million, conditional on such things as consent from the New Zealand Overseas Investment Office.

The casinos and hotels company said it expects the conditions to be satisfied through the rest of the year with settlement targeted for mid-December.

SkyCity will continue to manage the hotel for a transitional period until June 30 next year and said the proceeds will be used to repay debt.

The New Zealand dollar was trading at 56.52 US cents at about 5pm local time, slightly higher than 56.28c yesterday, reflecting US dollar weakness.