Hallenstein Glasson leads NZX50 higher amid Fed rate cut hangover

Hallenstein Glasson Holdings led New Zealand’s S&P/NZX 50 index higher after Forsyth Barr analysts raised their target price on the clothing chain and kept an ‘outperform’ rating, predicting the retailer’s sales growth will continue through the all-important Christmas period.

That was in a session where the benchmark index waxed and waned after the Federal Reserve delivered the quarter-point cut to its key interest rate as expected, albeit with several dissenting voices, and projecting just one reduction to the federal funds rate in 2026 and another the following year before settling into neutral.

S&P 500 futures are pointing to a soft opening for Wall Street as investors digest the Fed’s decision, and also after Oracle’s quarterly earnings showed the software firm’s debt-fuelled spending on artificial intelligence isn’t delivering returns, which weighed on ASX-listed tech companies such as Xero and WiseTech Global and left local software firms mixed.

And Fonterra Shareholders’ Fund units gained after the dairy exporter reaffirmed its earnings and milk price guidance at today’s annual meeting, while talking up its future as an ingredients and food service business once it’s shed the Mainland consumer arm to France’s Lactalis.

Finding a base

The NZX50 rose 24.81 points, or 0.2%, 13,395.87, with 28 stocks gaining, 19 declining and three unchanged. Turnover across the main board was $152.9 million, with Ryman Healthcare accounting for $17.1 million as it rose 2.5% to $2.88 on an unusually large volume of also 6 million shares, the most for the day. Of that, almost 5 million shares changed hands in a single trade at $2.85 a share.

Hallenstein Glasson led the benchmark, climbing 3.6% to $9.90 after Forsyth Barr analysts raised their target price on the retailer 65 cents to $11.75 and kept their ‘outperform’ rating, saying refurbishments and new stores in Australia should support sales growth.

“Key Christmas and summer trading periods are ahead, but Hallenstein Glasson has a decent recent track record of maintaining or improving sales momentum through the year,” analyst Paul Laxton Koraua said in a note to clients. “Store refurbishments, expansions, and new store openings in Australia should support continued sales growth in FY26.”

Fonterra Shareholders’ Fund units rose 2.5% to $8.251 after the dairy exporter reiterated earnings and farmgate milk price guidance at today’s annual meeting, and said it plans to spend up to $1 billion to grow value and make the cooperative’s operations more efficient. The cooperative’s farmer-owned shares rose 0.3% to $5.95.

Mainfreight rose 0.8%, or 50 cents, to $67.25, even after shedding rights to an 85 cents-per-share dividend.

Stock markets across Asia were mixed as investors digested the Federal Reserve’s 25 basis point cut to the federal funds rate, taking it to a range of 3.5%-to-3.75%, with three open dissenters voting against the move, and quieter opposition in the dot plot path for the benchmark rate next year.

“What’s coming through is the nervousness around inflation,” said Peter McIntyre, an investment adviser at Craigs Investment Partners.

The kiwi dollar rose to 57.97 US cents at 5pm in Auckland from 57.68 cents yesterday, even as swap rates eased from their recent highs, with the two-year rate down 4 basis points at 3.08%.

Rate sensitive stocks clawed back some of their losses earlier in the week when Westpac New Zealand’s hike in two- through five-year mortgage rates spooked some investors. Retirement village operator Summerset Group Holdings joined Ryman higher as it gained 3.2% to $12.20, while Argosy Property rose 2.5% to $1.25 and Goodman Property Trust advanced 1.8% to $2.02.

Peer into the crystal ball

Australia’s S&P/ASX 200 index rose 0.2% in late trading and Singapore’s Straits Times Index advanced 0.3%, while Japan’s Nikkei 225 dropped 1.1% and US futures were pointing to a 0.9% decline for the S&P 500 when Wall Street opens.

New York-listed Oracle’s earnings miss after the bell weighed on tech stocks across Asia, with the software firm’s debt-fuelled investment in AI infrastructure becoming emblematic of the growing scepticism about whether the burgeoning sector will deliver returns.

ASX-listed tech companies were softer, with Xero down 1.3% in late trading and WiseTech Global falling 2.1%. New Zealand tech firms were mixed as Serko rose 2.9% to $2.88 and Vista Group International gained 1.2% to $2.65, while Gentrack declined 1.8% to $9.23. Infratil, which counts the CDC data centre business as its biggest investment, slipped 1.2% to $11.32.

Ebos Group posted the biggest decline on the day, falling 2.2% to $27.25, while Freightways slipped 2.1% to $13.90.

Vital Healthcare Property Trust was unchanged at $2.04 on an unusually large volume of 4.2 million units, of which

Outside the benchmark index, Green Cross Health fell 5.1% to $1.025 after the Supreme Court rejected an application by the NZ Independent Community Pharmacy Group seeking to challenge district health board decisions enabling new pharmacies to operate in Countdown supermarkets in Gisborne and Wainuiomata.

Reporting by Paul McBeth. Image from Curious News.