NZX 50 dips in light trading after tight election; ANZ declines

New Zealand’s S&P/NZX 50 index was one of the weaker benchmarks across Asia in relatively light trading, with investors keeping their powder dry amid expectations the National-led coalition’s narrow lead was seen as surviving the special votes to be tallied later this month.

Export-focused companies such as Fisher & Paykel Healthcare and Mainfreight paced the decline, with a stronger kiwi dollar eating into their offshore revenue, while ANZ Group Holdings posted the steepest decline, even as its earnings met expectations.

Asian markets were largely stronger as Taiwanese authorities took steps to shore up investor confidence and tech companies followed Wall Street’s small recovery on Friday, while Nvidia launched an investigation into reports that chief executive Jensen Huang was the target of Chinese spying.

And dual-listed Ventia Services tumbled after the contract maintenance firm said second-half revenue would fall, while reaffirming earnings guidance as it moved to cut costs.

The quiet after the storm

The NZX 50 decreased 24.88 points, or 0.2%, to 13,973.62, with 24 stocks declining, 17 gaining, and nine unchanged. The S&P/NZX 20 index slipped 0.1% to 7,676.88, while the futures contract was untraded.

Turnover across the main board was $91.4 million, with F&P Healthcare accounting for $17.5 million as the country’s biggest listed company declined 1% to $47.98 in one of the biggest drags on the benchmark.

Ebos Group declined 2.1% to $21, Mainfreight fell 0.7% to $67.01, and a2 Milk Co slipped 0.5% to $8.76.

Exporters were among the weaker companies on the day as the kiwi dollar rose to 55.85 US cents at 5pm from 55.46 cents at the start of the day, and up from 55.64 cents on Friday. The New Zealand dollar rose to 81.05 Australian cents from 80.67 cents.

Forsyth Barr head of research Andy Bowley said the outcome of New Zealand’s general election over the weekend remained unclear, but that the most likely outcome was the National-led coalition retaining power with a slim majority.

“We do not expect any meaningful domestic equity-market moves at this stage as a result of the election; the preliminary result and most likely final result are generally consistent with the polling going into the election,” Bowley said in a note to clients. “While we recognise that equity markets like certainty, and some sector risks persist, particularly around electricity, the NZX will likely be more influenced by global events (fuel prices, AI fears, bond-market moves, etc) than government-formation machinations over the coming weeks.”

The thinly traded Polymarket contract priced a 90% chance of Christopher Luxon retaining the prime ministership.

Sanford was seen as one of the more exposed stocks to the election, due to proposals to phase out bottom-trawling. It rose 0.8% to $6.70.

Meridian Energy was the biggest tailwind for the local benchmark, gaining 1.1% to $5.65 after the country’s largest electricity generator’s Western Bays solar farm was referred for consideration under the fast-track consenting process. Auckland International Airport advanced 1% to $8.87 and Infratil increased 0.6% to $13.08.

A steadying hand

Markets across Asia were broadly stronger as tech stocks rallied as Taiwanese regulators imposed curbs on short selling and stood ready to deploy a stabilisation fund to boost investor confidence. Taiwan’s FTSE Taiwan50 index was up 5.8% in late trading, while Japan’s Nikkei 225 gained 3.2%, and Hong Kong’s Hang Seng increased 0.2%.

Meanwhile, Nvidia’s board said it was investigating reports that CEO Huang had been targeted by foreign intelligence.

Australia’s S&P/ASX 200 index was up 0.2% as gains for mining companies more than offset weak financial stocks, with the big four banks all declining on the ASX.

Dual-listed lender ANZ posted the steepest decline on the NZX 50, falling 2.8% to $47.85 after it met expectations with cash earnings of A$7.59 billion in the September year, up 10% on an adjusted basis from the prior year. Westpac Banking Corp increased 0.5% to $45.23 on the NZX, in contrast to its 0.5% dip on the ASX.

Spark New Zealand was the most heavily traded stock on the day with a volume of 2.4 million shares changing hands as the telecommunications company gained 1% to $2.08, while Precinct Properties NZ slipped 1% to $1 on a volume of 1.5 million as the commercial landlord resumed trading after its capital return.

Serko posted the biggest gain on the NZX 50, up 5% at $1.27, while KMD Brands rose 1.9% to $2.14 and Oceania Healthcare advanced 1.5% to 67 cents.

Outside the benchmark index, Ventia sank 20% to $5.90 after the maintenance contractor said trading remained challenging in the telco and energy sectors and that second-half revenue would be lower than the prior period. It reaffirmed annual earnings growth, saying it planned to cut costs by at least A$60 million by streamlining its operating structure.

Reporting by Paul McBeth. Image from Curious News.