Blue-chips drive NZX 50 higher; Palantir sets pace for trans-Tasman tech stocks

New Zealand’s S&P/NZX 50 index rose for a second day as heavyweights including Fisher & Paykel Healthcare, Meridian Energy and Infratil powered the benchmark higher, following Wall Street higher in a mixed Asian session.

Trans-Tasman tech stocks were broadly stronger after Palantir Technologies beat expectations when reporting its June quarter earnings after the bell, fuelling gains for the likes of Xero and WiseTech Global in Australia and Gentrack, Serko and Vista Group International in New Zealand.

The kiwi dollar clawed back some of its recent losses against the yen, with speculation the Bank of Japan needs to raise its benchmark interest rate for the Japanese currency to hold its recent gains.

And the Ministry of Business, Innovation and Employment hired Kristy McDonald KC to lead an investigation into culture and workplace conduct at the Financial Markets Authority, after chief executive Samantha Barrass went on leave last week while the board looked into cultural concerns.

Go higher

The NZX 50 rose 128.53 points, or 0.9%, to 13,903.46 with 29 stocks gaining, 15 falling and six unchanged. The S&P/NZX 20 index futures contract for September increased 0.6% to 7,765, with 1 lot traded for a turnover of $7,765, while the NZX 20 climbed 0.9% to 7,829.75.

Turnover across the main board was $145.8 million, of which F&P Healthcare accounted for $19.4 million as the country’s biggest listed company advanced 2.8% to $42.28, providing the biggest tailwind for the NZX 50.

Fellow heavyweight Infratil added to the benchmark’s gain, rising 2% to $15.09 and Meridian increased 2.3% to $5.77.

Fletcher Building advanced 2% to $3.69 and Vulcan Steel rose 3.1% to $6.65 after Forsyth Barr analysts said building consent data still pointed to an improving backdrop for building materials makers, even with downward pressure coming from tensions in the Middle East and mortgage rates coming off their lows.

Stock markets across Asia were broadly stronger, following a strong lead from Wall Street as the pause in the Middle East conflict buoyed markets on both sides of the Atlantic. Still, Brent crude oil futures for October rose 1.5% to US$85.02 a barrel at 5pm in Auckland amid conflicting reports as to whether the US and Iran were directly negotiating a reopening of the Strait of Hormuz.

Australia’s S&P/ASX 200 index was up 1.3% in late trading, with the major banks driving gains across the Tasman. Dual-listed Westpac Banking Corp increased 2.3% to $46.35 on the NZX, while ANZ Group Holdings advanced 0.7% to $45.11, while tech companies Xero and WiseTech climbed 2.5% and 2.3% respectively.

Hong Kong’s Hang Seng dropped 0.6%, while Japan’s Nikkei 225 index dipped 0.3%.

Not just AI

Gentrack joined a trans-Tasman rally in tech stocks after Palantir reported a near-doubling in second-quarter revenue and raised its annual outlook, beating analysts’ forecasts. The utilities software developer led the NZX 50 higher, climbing 4.6% to $3.85 while Serko advanced 3.6% to $1.575.

Vista rose 2.8% to $2.58 after getting several upgrades to its price target by brokers at UBS, Macquarie and Forsyth Barr after lifting its annual revenue guidance on Monday when reporting first-half earnings growth.

“The result was underpinned by solid customer win momentum alongside modest tailwinds from a supportive box office and favourable FX rates,” Forsyth Barr analysts James Lindsay and Georgio Toulis said in a note to clients, while lifting their target price 2 cents to $3.43 and keeping their ‘outperform’ rating.

Outside the benchmark index, Eroad increased 2% to $1.04 after the transport hardware and software developer appointed JVLN insurance software head David Leach as its new chief executive, effective from Oct 12.

Retailers were broadly weaker despite ANZ’s internal card spending data showing a lift in spending, with the biggest gains in durable goods and hospitality. KMD Brands fell 1.6% to $1.85 and Hallenstein Glasson Holdings slipped 0.6% to $10.60, while Briscoe Group increased 0.2% to $4.67.

Commercial landlords and retirement village developers were generally weaker as swap rates nudged higher, and ANZ lifted a range of mortgage and term deposit rates. Summerset Group Holdings posted the biggest decline on the NZX 50, falling 3.5% to $7.94, while Kiwi Property Group fell 2.1% to 93 cents, Ryman Healthcare slipped 1.4% to $2.10 and Stride Property dropped 1.3% to $1.16.

SkyCity Entertainment Group was the most heavily traded stock on the day with a volume of 8.4 million shares changing hands as the casino operator declined 0.8% to 62 cents.

The kiwi dollar rose to 92.43 yen at 5pm in Auckland from 91.99 yen yesterday, getting whipsawed by the joint intervention in foreign exchange markets by the US and Japan to prop up the currency. The New Zealand dollar traded at 58.68 US cents from 58.81 cents yesterday.

And MBIE appointed Kristy McDonald KC to lead an independent investigation into workplace conduct and culture at the FMA, with a view to completing it as soon as is reasonable. McDonald was tapped by justice minister Paul Goldsmith in June to investigate Human Rights Commissioner Stephen Rainbow over conduct concerns and staff engagement, and was tasked with investigating conflict of interest concerns at the FMA in 2022.

Reporting by Paul McBeth. Image from Curious News.