NZX 50 closes above 14k for first time as oil prices dip

New Zealand’s S&P/NZX 50 index closed above the psychological 14,000 level for the first time, in a mixed day across Asia as oil prices declined and ahead of earnings from Nvidia in the next gauge of the artificial intelligence trade.

Scales Corp led the benchmark index higher after the apple exporter’s latest record first-half result beat expectations, whereas heavyweight Meridian Energy was a drag, with the country’s biggest electricity generator projecting a flat year ahead.

The kiwi dollar dropped against its Australian counterpart as data showed consumer prices rising at a faster clip across the Tasman than anticipated, raising the stakes for another rate hike by the Reserve Bank of Australia.

Meanwhile, Winton Land tumbled after chair Steven Joyce and independent director Guy Fergusson quit the property developer’s board, deciding they weren’t on the same page as majority shareholder and ousted chief executive Chris Meehan.

A new record

The NZX 50 gained 20.49 points, or 0.2%, to 14,013.21, having touched a new all-time high 14,069.22 during the session. Within the index, 25 stocks rose, 19 fell, and six were unchanged. The S&P/NZX 20 index futures contract for September rose 0.2% to 7,810, with 100 lots traded for a value of $780,000, while the NZX 20 edged up 0.1% to 7,862.36.

Turnover across the main board was $133.7 million, of which Auckland International Airport accounted for $17.9 million as the country’s major gateway rose 1.1% to $8.70, providing the biggest tailwind for the benchmark index. Brent crude oil futures fell 2.6% to US$86.20 a barrel at 5pm in Auckland.

“It feels a bit more stable today – the big test comes overnight with Nvidia,” said Mark Lister, investment director at Craigs Investment Partners. “In the last 14 quarters, they’ve beaten expectations in 13 of those.”

Stock markets across Asia were mixed, with Japan’s Nikkei 225 index up 0.8% in late trading and Hong Kong’s Hang Seng advancing 0.7%, while Australia’s S&P/ASX 200 index declined 0.3%, as sticky inflation raised the prospect of a rate hike across the Tasman.

Bevan Graham, an economist at Salt Funds Management, said the Australian inflation reading was an ugly print.

“Given the RBA's hawkish comments on the upside risks to inflation and willingness to respond, this increases the prospect of a further rate hike from the RBA,” Graham said in a note. “That said, I don’t think they’ll jump the gun and go as early as the September meeting.”

The kiwi dollar fell to 82.96 Australian cents at 5pm in Auckland from 83.32 cents yesterday, and traded at 59.54 US cents from 59.56 cents.

‘Dem apples

Scales led the NZX 50 higher, climbing 5.4% to a record close $7.19, after its 18% lift in first-half earnings beat expectations.

Vulcan Steel clawed back all of Tuesday’s losses, gaining 4.8% to $6.55, while Gentrack advanced 3.3% to $4.40 and Napier Port Holdings rose 3.1% to $3.65.

Spark New Zealand was the most heavily traded stock on the day with a volume of 3.1 million shares, with the telco up 0.9% at $2.20.

Serko posted the steepest decline on the benchmark, falling 4.5% to $1.475, while Air New Zealand slipped 3.7% to an all-time low 39.5 cents on an adjusted basis ahead of its annual result on Thursday.

Meridian declined 2.1% to $5.50 after the power company returned to profit, with earnings surging 72% to $1.05 billion in the June year, and hiking its final dividend more than expected. Still, the electricity generator-retailer signalled earnings would be little changed in the coming year, with wholesale forward prices easing.

Outside the benchmark index, Winton dropped 6.5% to $1.29 after the independent director exodus at the property developer, which reported stronger than expected annual earnings, despite the internal ructions and difficult trading conditions.

Steel & Tube Holdings sank 11% to 36 cents as the steel products maker said it planned to sell assets to try to repair its balance sheet. Operating cash flow improved, although the annual loss widened on impairment charges.

And Scott Technology climbed 5.1% to $2.89 after the automation systems maker said it was targeting revenue of $165 million from its protein arm by 2030.

Reporting by Paul McBeth. Image from Curious News.