NZX 50 ekes out small gain as Meridian, Infratil rally

New Zealand’s S&P/NZX 50 index ended the day in the green, as gains for Meridian Energy and Infratil nudged the benchmark into positive territory after hotter-than-expected US inflation heightened the prospect of a rate hike by the Federal Reserve next month.

Interest rate-sensitive stocks such as commercial landlords including Kiwi Property Group and Goodman New Zealand were weaker as local bond yields followed their US counterparts higher.

Asian stock markets were broadly stronger with pessimism about tech companies easing as US neocloud firm CoreWeave’s revenue beat expectations and Anthropic pressed ahead with its initial public offering.

And minnow aged care operators had a mixed day, with Promisia Healthcare gaining as it declared a maiden dividend, while Radius Residential Care declined as its increased dividend came in below analysts’ expectations.

Late rally

The NZX 50 increased 12.45 points, or 0.1%, to 14,179.86, with 21 stocks gaining, 27 declining and two unchanged. The S&P/NZX 20 index futures contract for December gained 0.3% to 7,800, with 51 lots traded for a value of $397,000, while the NZX 20 edged up 0.1% to 7,804.56.

Turnover across the main board was $99.4 million, of which Fisher & Paykel Healthcare accounted for $13.7 million as it decreased 0.2% to $48.44, while Auckland International Airport nudged up 0.1% to $9 on a turnover of $12.3 million.

Stocks across Asia were generally stronger, with South Korea’s Kospi up 2.3% and Japan’s Nikkei 225 index gaining 1.1% as tech companies were buoyed by CoreWeave’s stronger than expected third-quarter revenue, which helped quell some of the fears about the artificial intelligence trade. Australia’s S&P/ASX 200 index was up 0.1% in late trading.

Meanwhile, Anthropic set the range for its IPO at US$70-to-US$78 a share for a valuation of US$1.4 trillion, although the Financial Times reported that investment bankers planned to lift the price for a target valuation of US$1.5 trillion.

Separately, the Wall Street Journal reported OpenAI’s third-quarter revenue jumped by about 50% to US$10 billion, lagging behind Anthropic.

“Anthropic going for US$1.4 trillion will test the AI trade big time,” said Peter McIntyre, an investment adviser at Craigs Investment Partners.

Data centre investor Infratil was one of the bigger tailwinds for New Zealand’s NZX 50, climbing 1.3% to $13.66, while Meridian gained 2.8% to $5.94.

Utilities software developer Gentrack posted the biggest gain on the day, up 9.1% at $4.80, while stock market operator NZX rose 4% to $1.55 and fishing group Sanford rose 3.6% to $6.84.

US inflation data overnight fuelled expectations for the US Federal Reserve to raise its federal funds rate more aggressively, which is typically a headwind for stock market valuations.

“People are now talking about a double dip – 50 basis points – when the Fed meets,” McIntyre said, referring to the prospect of a half-percentage point increase.

Sensitive rates

The yield on New Zealand’s 10-year government bond rose 6 basis points to 4.68% at 5pm in Auckland, and rate-sensitive property stocks were broadly weaker as Kiwi Property fell 1.1% to 93.5 cents, Goodman NZ declined 1.1% to $1.89 and Precinct Properties NZ slipped 1% to $1 on a volume of 2.1 million shares, the most for the day.

The kiwi dollar fell to 56.06 US cents at 5pm from 56.34 cents yesterday, and traded at 81.51 Australian cents from 81.42 cents.

The a2 Milk Co posted the biggest decline, falling 1.7% to $8.87, while Serko dropped 1.6% to $1.22 and Oceania Healthcare decreased 1.5% to 65 cents.

Fletcher Building increased 0.5% to $3.75 after Statistics New Zealand figures showed concrete production remained robust in the September quarter.

Brad Olsen, chief economist at Infometrics, said he continued to be surprised by the level of concrete being poured, given the prospect of shrinking commercial work in line with low consent volumes.

“This stronger concrete activity presents upside risks to our expectations for construction volumes, especially for infrastructure,” Olsen said in a note.

Spark New Zealand advanced 1% to $2.13. Activist shareholder Tommy Scrivener today wrote an open letter to chair Vince Hawksworth questioning the accounting treatment of a $278 million gain on the sale of a 75% stake of its data centre business.

Mainfreight fell 1.2% to $66.55 ahead of its first-half result on Thursday, when it’s expected to report a 28% lift in first-half earnings.

Outside the benchmark, Radius Care fell 2.4% to 41 cents after the aged care operator lifted its interim dividend to 1.1 cents per share and reported a 17% increase in first-half pre-tax profit. Forsyth Barr analysts predicted it would declare a 1.2 cent dividend.

Promisia Healthcare climbed 3.9% to 67 cents after the company declared its maiden dividend, with underlying first-half earnings up 50%.

Winton Land decreased 0.9% to $1.16 after the property developer hired Kate Baguley as chief financial officer, starting in February. She’s currently head of finance at Smales Farm in Auckland.

Reporting by Paul McBeth. Image from Curious News.