US President Donald Trump’s countdown to introducing tariffs remained at the forefront for investors across Asia, with the Nikkei 225 surging after Japan reached a trade deal with the world’s biggest economy.
Stock markets across Asia were broadly stronger, although New Zealand’s S&P/NZX 50 index was left in their wake with heavyweights Infratil, Fisher & Paykel Healthcare and Spark New Zealand among those dragging the benchmark lower.
Meanwhile, SkyCity Entertainment Group climbed back above $1 after Forsyth Barr analysts called time on the ‘underperform’ rating, upgrading it to an ‘outperform’ as they pondered the future of the casino operator’s property portfolio.
And Australian banks bounced back from their recent selloff across the Tasman, with the dual-listed Westpac Banking Corp and ANZ Group Holdings both on the rise after Australia’s banking regulator said it won’t ease mortgage lending rules in assessing borrowers’ capacity to repay their loans.
The rising sun
Japan’s Nikkei was up 3.5% in late trading as investors rallied behind a trade deal being struck with the US ahead of President Donald Trump’s more punitive tariff regime coming into effect next month.
That upbeat sentiment – buoyed by upcoming trade talks between the US and China – flowed across Asia, with Singapore’s Straits Times Index up 0.4%, Hong Kong’s Hang Seng advancing 1.3% and Australia’s S&P/ASX 200 index climbing 0.8%.
The kiwi climbed to 88.40 yen at 5pm in Auckland from 87.94 yen at 7am and 87.96 yen yesterday, after the Bank of Japan deputy governor Shinichi Uchida said downside risks over trade remain extremely high while reiterating the central bank is ready to hike interest rates.
And Japanese media reported prime minister Shigeru Ishiba will announce his resignation before the end of August after the defeat his ruling coalition received in last week’s election.
The kiwi dollar rose to 60.16 US cents from 59.59 cents yesterday.
Left behind
Meanwhile, New Zealand’s stock market was left behind as the NZX50 fell 39.68 points, or 0.3%, to 12,794.06, with 21 stocks declining, 24 gaining and five unchanged. Turnover across the main board was $119.2 million.
Blue-chip companies weighed most heavily on the benchmark, with Infratil falling 2.5% to $11.17, F&P Healthcare declining 0.8% to $36.41 and Spark slipping 1.2% to $2.50.
Oceania Healthcare led the NZX50 lower, falling 2.8% to 69 cents, while Ryman Healthcare slipped 1.6% to $2.49. Summerset Group Holdings advanced 0.3% to $11.68.
SkyCity posted the biggest gain on the benchmark index, up 5.2% at $1.01 after it was upgraded to ‘outperform’ by Forsyth Barr analysts, who also raised their target price 35 cents to $1.35 with the trading discount ignoring its hard assets and a clear path to reducing debt and improving cashflow.
“The property portfolio provides a valuation floor as it unlocks optionality to realise value through asset sales, concessions, or joint ventures,” analysts Paul Laxton Koraua and Andy Bowley said in a note to clients. “Any capital release would accelerate deleveraging and act as a catalyst for rerating.”
Only on three
Sky Network Television rose for a second day after buying free-to-air TV operator Three for a dollar. The pay-TV operator gained 2% to $3.12, with Investment Services Group emerging as a substantial shareholder with a 5.1% stake from the combined holdings of its Devon Funds and Clarity Funds units.
Australian banks rallied across the Tasman after the Australian Prudential Regulation Authority kept its macro-prudential policy settings unchanged, meaning lenders still need to test whether a borrower can make their repayments at an interest rate of at least 3 percentage points above their mortgage rate. ANZ climbed 2.5% to $33.30 on the NZX, while Westpac increased 0.7% to $35.83.
Precinct Properties NZ was the most heavily traded stock on a volume of 2.8 million, as it rose 2.1% to $2.50.
Tower increased 0.6% to $1.68 after the insurer said it’s ending multipolicy discounts for all offerings, with the promotions at risk of creating another error that led to $9.5 million of overcharging and a civil claim brought by the Financial Markets Authority.
Outside the benchmark index, Colonial Motor Co was unchanged at $7.05 after the dealership owner said the June half wasn’t as bad as earlier feared, with annual earnings likely to be close to the previous year.
Reporting by Paul McBeth. Image from Jezael Melgoza on Unsplash.
