NZX 50 hits record as oil prices slump after US midterms

New Zealand’s S&P/NZX 50 climbed to an all-time high, joining a widespread rally as oil prices tumbled after the Democrats swept the two houses of Congress in the US midterm elections in a rebuke to President Donald Trump’s Republican Party.

Exporters were some of the day’s biggest gainers, with Fisher & Paykel Healthcare, the Fonterra Shareholders’ Fund and a2 Milk Co among the NZX 50’s leaders.

Infratil climbed to a three-week high as established data centre investors fared well under the prospect of increased artificial intelligence regulation and a slowing down of the AI infrastructure build, while across the Tasman NextDC soared after its recent slump attracted a raid on its share register.

Dual-listed lenders Westpac Banking Corp and ANZ Group Holdings were at the bottom of the local leaderboard after ASX-listed National Australia Bank tumbled on a bigger decline in annual earnings than analysts’ forecast, and with a sharp increase in impairment charges.

Sea of green

The NZX 50 posted its biggest daily gain since April last year, jumping 307.52 points, or 2.2%, to 14,090.97, with 37 stocks gaining, seven falling and five unchanged. Precinct Properties New Zealand was in a trading halt for its capital return.

The S&P/NZX 20 index futures contract for December climbed 2.4% to 7,730, with 640 lots traded for a value of $4.9 million, while the NZX 20 advanced 2.3% to 7,734.68.

Turnover across the main board was $140.4 million, of which F&P Healthcare accounted for $30 million as the country’s biggest listed company rose 3.9% to $48.56.

Stock markets across Asia followed Wall Street’s rally as Brent crude oil futures extended their decline, falling 1.1% to US$93.59 a barrel after the Democratic Party’s sweep of the Senate and House of Representatives in the US midterm elections. The White House’s war in Iran copped the blame for the crumbling support for the Republicans and US President Donald Trump said he had no immediate plans to strike the Islamic Republic.

“We didn’t see that coming – it was reminiscent of 2016 when the futures were pointing to a terrible day when Trump got first elected, and markets went up big time,” said Mark Lister, investment director at Craigs Investment Partners. “A big part of the gains was the oil price falling – we’re going to have to wait and see whether it holds over the next few weeks.”

Australia’s S&P/ASX 200 index climbed 2.3% and Hong Kong’s Hang Seng jumped 3.1%. The rally wasn’t universal, with the AI-exposed Japanese and South Korean markets weaker on the prospect of a slower infrastructure build and increased regulation of the technology. The Nikkei fell 1.3% and the Kospi sank 4.5%, triggering circuit-breaker trading halts.

Hard data

Infratil gained 4% to $13.25 as investors showed a preference for existing data centre investors if the pace of new construction slowed. In Australia, NextDC surged 47% after property developer Goodman Group and New York-listed Digital Realty Trust acquired 7.5% of the ASX-listed data centre landlord’s stock following its recent slump.

Exporters were broadly stronger despite the kiwi dollar gaining against a weaker greenback. The NZ dollar rose to 56.47 US cents at 5pm in Auckland from 55.93 cents yesterday, and traded at 80.57 Australian cents from 80.39 cents.

Fonterra Shareholders’ Fund units rose 5% to $9.44 and a2 Milk gained 3.4% to $8.95, while Skellerup Holdings advanced 2.9% to $7.77.

Gentrack posted the biggest gain on the day, up 5.6% at $4.35.

Westpac fell 2.1% to $44.80 and ANZ declined 1.2% to $49.25, with the dual-listed lenders the worst performers on the NZX 50. ASX-listed NAB sank 5.2% in late trading after the bank missed analysts’ expectations as it reported a 13% slide in annual cash earnings and took a A$1.5 billion credit impairment charge.

Spark New Zealand was the most heavily traded stock on the day, with a volume of 3.5 million shares changing hands as the telecommunications carrier rose 2% to $2.08.

Outside the benchmark, Comvita gained 2.7% to 77 cents on an unusually large volume of 3.1 million shares – the bulk of which was in a single trade at 78 cents.

Tāiko Critical Minerals fell 4.6% to 21 cents after the prospective miner reported a first-half loss of $3.8 million in the six months ended Sept 30 as it continued to explore and evaluate its West Coast project. It had cash and equivalents of $7.8 million at the balance date.

Allied Farmers declined 2.4% to 62 cents after the rural services firm agreed to sell two Waikato farming properties to an entity associated with the current tenant for $2 million.

And the yield on New Zealand’s 10-year government bond fell 7 basis points to 4.65% after NZ Debt Management’s latest tender attracted strong demand.

Reporting by Paul McBeth. Image from Curious News.