NZX 50 gains as Infratil joins data centre investor rally; RBA hikes

New Zealand’s S&P/NZX 50 index gained as Infratil joined a rally among data centre investors across the Tasman as the Reserve Bank of Australia hiked its benchmark rate as expected, and noted the heavy investment in artificial intelligence infrastructure was softening the economic slowdown.

Stock markets were mixed across Asia as investors remained uneasy about tech stocks despite stronger-than-expected results from Apple and Palantir Technologies and a sharp decline in oil prices.

Local materials firms and property developers were mixed after Statistics New Zealand figures showed new residential building consents continued to ease from their peak.

And exporters with big exposure to China such as a2 Milk Co, Sanford and the Fonterra Shareholders’ Fund were mixed as the People’s Bank of China moved to end the rally in the yuan by asking banks to hold more foreign currencies.

Market risk

The NZX 50 rose 21.64 points, or 0.2%, to 13,720.26, with 27 stocks gaining, 17 declining, and six unchanged. The S&P/NZX 20 index futures contract for December slipped 0.1% to 7,523, with 100 lots traded for a value of $753,000, while the NZX 20 increased 0.2% to 7,515.47.

Turnover across the main board was $128.6 million, of which Fisher & Paykel Healthcare accounted for $27.1 million as the country’s biggest listed company nudged up 0.2% to $46.20.

Stock markets across Asia were mixed as Japan’s Nikkei 225 slipped 0.3% and South Korea’s Kospi dropped 3.6% following the nervous end for tech stocks on Wall Street, while Hong Kong’s Hang Seng rose 0.5%, buoyed by China’s pledge to reinforce the city’s position as a global financial hub.

The kiwi rose to 3.7420 Chinese yuan from 3.7378 yuan yesterday after the People’s Bank of China lifted the foreign reserves ratio for banks, slowing the yuan’s appreciation this year.

Local exporters were mixed, with Fonterra Shareholders’ Fund units down 0.3% at $8.88, while a2 Milk increased 0.1% to $8.78 and Sanford advanced 0.2% to $6.90. Comvita was unchanged at 75 cents.

Meanwhile, the RBA hiked its cash rate 25 basis points to 4.85% as expected in a split decision, with inflation predicted to remain elevated through 2027 and at risk of embedding in expectations. The majority judged an increase was warranted, and reiterated it would do what it deemed necessary to bring inflation back into its target range.

The kiwi dollar rose to 80.48 Australian cents at 5pm in Auckland from 80.27 cents immediately before the release, and up from 79.97 cents yesterday. The local currency traded at 56.19 US cents from 56.17 cents.

Australia’s S&P/ASX 200 index gained 0.4% in late trading, buoyed by retailers and real estate as some investors saw the RBA’s hike as the last of the tightening cycle.

Big data

Infratil climbed 1.5% to $12.62, providing the biggest tailwind for the NZX 50, as it joined ASX-listed NextDC and DigiCo Infrastructure real estate investment trust higher after the RBA noted the increased investment in data centres as cushioning the slowdown in the Australian economy.

Stock market operator NZX posted the biggest gain on the day, up 4.1% at $1.52, and unwinding all of yesterday’s decline when it was at the bottom of the leaderboard.

Spark New Zealand was the most heavily traded stock on the day with 1.7 million shares traded as it rose 1% to $1.99, while Chorus gained 2% to $8.19.

Fletcher Building rose 2.6% to $3.54 and Vulcan Steel gained 1.2% to $6.90 in a mixed day for materials firms and property developers after Stats NZ figures showed a 7.9% slide in new residential building consents in September, slowing the annual uplift.

“While consents are at firm levels, they are flattening off,” Westpac NZ senior economist Satish Ranchhod said in a note. “More generally, the rise in interest rates, the related softness in the housing market, and a pickup in building costs are all likely to provide some brake on the number of new projects coming to market.”

Meanwhile, non-residential consents eased, with declines in new retail and office space.

Outside the benchmark index, Steel & Tube – which is more exposed to commercial work – dropped 3.3% to 29 cents, while property developers CDL Investments and Winton Land were both weaker, down 3.1% at 62 cents and 0.4% at $1.195 respectively.

Mercury NZ fell 2.4% to $6.59 in the biggest decline for the NZX 50, with power companies broadly softer on the day. Contact Energy slipped 1.4% to $8.39, Meridian Energy decreased 0.4% to $5.38 and Genesis Energy was down 0.8% at $2.39.

Reporting by Paul McBeth. Image from Curious News.