NZX 50 dips 0.1% this week as AI spending keeps investors on edge

New Zealand’s S&P/NZX 50 index fell this week as rising oil prices and renewed fears about the pace of spending on artificial intelligence infrastructure kept investors nervous, with Serko, Infratil and Channel Infrastructure at the bottom of the leaderboard.

The local benchmark fared better than some of its peers across Asia, as Meta Platforms’ accelerating AI spending knocked markets in South Korea and Japan.

Lodestone Energy rose in its second day on the stock exchange, while Winton Land advanced as new chair Michael Stiassny gave the lay of the land in trying to settle down a turbulent period for the property developer.

And ikeGPS dipped after the power pole analysis firm said it was broadly tracking in line with expectations in the September quarter.

Friday trading

The NZX 50 declined 12.91 points, or 0.1%, to 13,733.93 on Friday, taking the weekly decline to 0.1%.

Serko posted the sharpest fall of the week, sliding 9% to its lowest level since March 2020, while Infratil dropped 5.7% and Channel Infrastructure declined 5.5%. Hallenstein Glasson Holdings fell 5.6% across the week.

Gentrack was the only top 50 stock to gain more than 5% in the week, up 7%.

Within the NZX 50, 25 stocks fell on Friday, 19 gained and six were unchanged. The S&P/NZX 20 index fell 0.2% to 7,502.5, while the futures contract was untraded.

Turnover across the main board was $108 million on Friday, of which Fisher & Paykel Healthcare accounted for $26.4 million, with the country’s biggest listed company dipping 1 cent to $48.87.

Stock markets across Asia declined on Friday, as investors fretted over Meta’s shift into negative free cash flow as the social media giant ramps up spending on AI infrastructure. Meanwhile, SK Hynix scrapped a planned initial public offering of its Solidigm unit in the US after it faced pushback from regulators and shareholders.

South Korea’s Kospi fell 0.9% in late trading, while Japan’s Nikkei 225 index dropped 1.3% and Australia’s S&P/ASX 200 index dipped 0.1%.

“Meta’s historically been a free cash flow positive company and it’s a big deal to go into negative,” said Peter McIntyre, an investment adviser at Craigs Investment Partners.

Brent crude oil futures increased 0.4% to US$113.66 a barrel at 5pm in Auckland as tensions in the Middle East remain high.

Heavy blue chips

Infratil was the biggest drag on the NZX 50 on Friday, slipping 1% to $12.15 amid the cooling appetite for AI stocks and as geopolitical uncertainty weighed on investors.

Fletcher Building posted the biggest decline on the day, falling 4.8% to $3.20, while Serko dropped 3.8% to $1.01 and Summerset Group Holdings slipped 3.2% to $6.65.

ANZ Group Holdings posted the biggest gain on the day, up 3.2% at $49.35, while Vector advanced 3.1% to $4.64 and Mainfreight increased 3.1% to $67.50.

Spark New Zealand decreased 0.5% to $1.88 on a volume of 3 million shares, the most for the day. Stock market operator NZX was unchanged at $1.46, with 1.2 million shares traded.

Outside the benchmark index, Lodestone rose 0.9% to $2.30 in its second day of trading, in a mixed session for power companies. Contact Energy slipped 1.1% to $8.52 and Genesis Energy decreased 0.9% to $2.33, while Meridian Energy was unchanged at $5.63 and Mercury NZ increased 0.3% to $6.76.

Winton gained 1.8% to $1.16 after chair Stiassny told shareholders today how the new-look board was fixing the firm’s governance, stressing that the property developer wasn’t a broken business.

IkeGPS declined 1% to $1 after the power pole analysis firm said annualised subscription revenue climbed 13% to $22 million in the September quarter, and gave annual guidance for growth of more than 30%.

The kiwi dollar traded at 56.97 US cents at 5pm in Auckland from 56.89 cents yesterday, while the yield on the New Zealand 10-year government bond fell 4 basis points to 4.95%.

Reporting by Paul McBeth. Image from Curious News.