NZX 50 slides as fears over Chinese AI competition knock Asian markets
PGG Wrightson rallied as it upgraded its earnings outlook.
New Zealand’s S&P/NZX 50 index joined a selloff across Asia amid reports that Chinese memory chipmaker ChangXin Memory Technologies was catching its rivals, knocking South Korea’s Kospi and triggering a circuit-breaker pause in trading for the bourse dominated by SK Hynix and Samsung Electronics.
Auckland International Airport was the biggest drag on the local market in a broad decline for the top 50 stocks, with interest rate-sensitive firms such as Chorus and Vector at the bottom of the leaderboard.
SkyCity Entertainment Group rallied as the casino operator was successful in an auction to apply for licences under New Zealand’s new online gambling regime.
And PGG Wrightson climbed to a four-week high after raising its earnings guidance, with the outlook for agriculture still strong.
Chinese competitors
The NZX 50 snapped a three-day rally, falling 78.02 points, or 0.6%, to 13,749.6, with 31 stocks declining, 13 gaining and six unchanged. The S&P/NZX 20 index dropped 0.7% to 7,514.9, with the futures contract untraded.
Turnover across the main board was $119.3 million, of which Fisher & Paykel Healthcare accounted for almost $21 million as the country’s biggest listed company rose 0.7% to $48.80.
Stock markets across Asia were generally weaker as the narrowing gap between CXMT’s memory chips and its rivals weighed on chip stocks. South Korea’s Kospi sank 6.1% in late trading and had to pause trading when it breached the threshold triggering a circuit-breaker to prevent disorderly trading.
Hong Kong’s Hang Seng slipped 0.4%, while Australia’s S&P/ASX 200 index nudged up 0.1%, with the big four banks gaining ahead of earnings from the likes of JPMorgan Chase & Co and Goldman Sachs on Wall Street.
“Micron was weaker based on competition from the Chinese,” said Peter McIntyre, an investment adviser at Craigs Investment Partners. “We’ve had this previously when the Chinese came up with their own version of ChatGPT – that’s been enough to scare the market which is jumping around looking for a reason to sell off.”
Local data centre investor Infratil slipped 0.6% to $13.36.
Yielding ground
Auckland Airport was the biggest drag on the NZX 50, falling 2.8% to $8.20, while Chorus dropped 3.3% to $8.11, the steepest decline on the benchmark. Vector fell 2.5% to $4.61.
Ryman Healthcare fell 2.5% to $1.785 and Summerset Group Holdings declined 1.3% to $6.70, with the retirement village operators giving back some of yesterday’s gains.
Oceania Healthcare posted the biggest gain on the NZX 50, up 3% at 68 cents.
SkyCity gained 2.3% to $2.82 after the casino operator said it was a successful participant in the auction for allocation of rights to apply for online gambling licences, with a licence fee of $15 million each for the two licences it bid for. The company said it would now start the application process. The casino operator was the most heavily traded stock on the day, with a volume of 2.1 million shares.
Port of Tauranga rose 0.7% to $8.31. The maritime hub operator said it had been notified of three appeals and two judicial review applications for its Stella Passage consent.
Outside the benchmark index, PGG Wrightson jumped 6.8% to $2.21 after the rural services firm said it expected annual earnings of $70 million in the June 2027 financial year, up from the $64.3 million it reported in 2026.
Tāiko Critical Minerals gained 7.1% to 22.5 cents. The would-be miner yesterday said it would proceed with its feasibility study after it finished drilling to test the resource at the Barrytown project on the West Coast, with 21% of the 35 million tonnes of mineral sands assessed to be heavy minerals.
The kiwi dollar traded at 55.93 US cents at 5pm in Auckland from 56.07 cents yesterday.
Reporting by Paul McBeth. Image from Curious News.
