Blue chips out in force as NZX50 surges for a second day

New Zealand’s S&P/NZX 50 index rose for a second day with blue chips Fisher & Paykel Healthcare, Ebos Group, Meridian Energy and Mercury NZ among those pacing the benchmark higher in an upbeat day across Asia, with Australia’s S&P/ASX 200 index hitting a record.

Fletcher Building led the NZX50 higher with the building materials firm getting a mixed review from brokers after its largely flat first-half result on Wednesday, while apple exporter Scales Corp rallied on an upgrade to its annual earnings outlook.

Earnings season was a mixed bag as Auckland International Airport rallied later in the day as an improving outlook for passenger growth prompted it to lift the bottom end of its annual earnings guidance, while SkyCity Entertainment Group’s expectedly soft result saw it at the bottom of the leaderboard.

And Fonterra Cooperative Group’s farmer-shareholders overwhelmingly voted in favour of the $3.2 billion capital return from the proceeds of selling the Mainland consumer business to France’s Lactalis.

Rising with conviction

The NZX50 climbed 164.25 points, or 1.2% to 13,411.27, with 38 stocks gaining, five falling and seven unchanged. Turnover across the main board was $153.9 million, of which Contact Energy accounted for $21.2 million as it rose 2.2% to $9.39.

The electricity-generator retailer opened the retail component of its $525 million capital raising today at the lower price of $8.75 a share or a 2.5% discount to the volume weighted average price.

The benchmark index was powered higher by heavyweight companies, including exporters buoyed by the slide in the kiwi dollar after the Reserve Bank hosed down expectations for a pre-election rate hike in keeping the official cash rate at 2.25% yesterday. Fisher & Paykel Healthcare rose 2.2% to $37.60 on a turnover of $20 million, while Ebos Group gained 2.9% to $25.42.

Power companies were broadly stronger as Meridian Energy increased 2.1% to $5.76 and Mercury NZ advanced 2.3% to $6.33. Genesis Energy dipped 0.8% to $2.41.

Fletcher Building led the benchmark higher, rising 3.4% to $3.63 after its 1% dip in first-half earnings on Wednesday got a mixed response from analysts, as UBS raised its target price 1.4% to $3.60 and Macquarie trimmed its target 1.7% to $1.73. Forsyth Barr’s research team kept its target price at $4.15.

“There are signs of cyclical momentum: costs are being reduced with more to come, legacy issues are being closed out, and there is a pathway for net debt to reduce to the low end of its target range,” Forsyth Barr analyst Rohan Koreman-Smit said in a note to clients. “That said, risks remain, particularly around competitive pressures in distribution, meeting consensus growth expectations, and the ability to monetise residential invested capital.”

Lifting the undercarriage

Auckland International Airport rose 1.9% to $8.73 after lifting first-half earnings 6% in line with expectations, while lifting the bottom end of its annual guidance on the ongoing recovery in passenger numbers.

Air New Zealand was unchanged at 58.5 cents, while Tourism Holdings increased 1.3% to $2.37.

SkyCity Entertainment Group posted the biggest decline on the NZX50, falling 3.5% to 84 cents after reporting a 28% slump in first-half underlying earnings.

Scales Corp rose 3.4% to $6.10 after the apple exporter lifted the range of adjusted profit it will report for calendar 2025, while Vital Healthcare Property Group was unchanged at $1.95 after reporting a 14% lift in first-half adjusted funds from operations.

Spark New Zealand was the most heavily traded stock on the day with a volume of 4.6 million shares changing hands, as the telco rose 1.9% to $2.15.

Fonterra Shareholders’ Fund units rose 1.6% to $8.028 after the cooperative’s farmer-shareholders voted overwhelmingly for the $3.2 billion, or $2 per security, capital return proposed from the proceeds of selling the Mainland consumer business to Lactalis for $4.2 billion. Fonterra Cooperate Group’s farmer-owned shares increased 0.3% to $6.12.

Across the Tasman, the ASX 200 was up 0.9% in late trading, having hit a record during the session as energy stocks such as Woodside Energy and Santos rallied on increased oil prices – Brent crude futures climbed above US$70 a barrel overnight amid fears the US and Iran will turn to military measures if they can’t reach a deal on the Middle Eastern nation’s nuclear programme.

Australian banks were also stronger, with dual-listed Westpac Banking Corp up 2.8% at $49.60 on the NZX and ANZ Group Holdings advancing 2% to $47.44.

The kiwi dollar fell to 84.58 Australian cents at 5pm in Auckland from 84.86 cents yesterday after jobs growth in January across the Tasman encouraged bond traders to price in another rate hike by the Reserve Bank of Australia in June.

The kiwi dollar extended its decline against the greenback during the day, trading at 59.75 US cents at 5pm in Auckland from 59.99 cents yesterday.

Reporting by Paul McBeth. Image from Curious News.