NZX 50 slides as Infratil gets caught in souring AI sentiment

New Zealand’s S&P/NZX 50 index was a laggard across Asia as heightened nerves about spending on artificial intelligence infrastructure knocked Infratil.

Asian markets were broadly stronger as oil prices eased from last week’s highs and as Chinese economic growth beat forecasts, buoying local exporters such as a2 Milk Co and the Fonterra Shareholders’ Fund.

Statistics New Zealand’s September quarter inflation report is the highlight on the local economic front, with data today showing services activity continued to grow last month and more expensive fuel widened the annual trade deficit.

And Pacific Edge was unchanged after Medicare proposed price increases for its Monitor and Triage products, and its Cxbladder gained in-network coverage at Blue Cross plans in North and South Carolina.

Against the grain

The NZX 50 fell 101.6 points, or 0.7%, to 13,652.07, with 24 stocks declining, 20 gaining and six unchanged. The S&P/NZX 20 index futures contract for December dropped 0.9% to 7,475 with 130 lots traded for a value of $973,000, while the NZX 20 was down 1% at 7,444.7.

Turnover across the main board was $116.2 million, of which Fisher & Paykel Healthcare accounted for $24.7 million, as the country’s biggest listed company gained 0.4% to $48.79.

Stock markets across Asia were generally stronger as Brent crude oil futures fell 1.9% to US$107.75 a barrel at 5pm in Auckland, while Nasdaq futures recovered from Friday’s slump ahead of key earnings from the likes of Meta Platforms later this week. South Korea’s Kospi climbed 0.9% in late trading, while Hong Kong’s Hang Seng advanced 0.5% after data showed China’s gross domestic product grew 4.5% in the September quarter from a year earlier, beating the 4.4% median forecast by economists.

Indonesia’s Jakarta Composite Index sank 5.1% after MSCI warned it could downgrade the nation, which would trigger an outflow of investment funds if the country was removed from major global benchmarks.

Australia’s S&P/ASX 200 index was up 0.3% in late trading, with gains among financial stocks and energy companies offset broadly weaker tech firms. NextDC shares were halted after the data centre developer said its M3 project in Melbourne had been delayed.

“The Nasdaq was off 2% on Friday and 4.5% over the week as investors question the amount of capital going into AI infrastructure,” said Jeremy Sullivan, an investment adviser at Craigs Investment Partners. “Infratil is getting caught up in that as well.”

Another decline

Infratil led the NZX 50 lower as it fell for a fifth day, sliding 5.1% to $12.22. Chorus declined 3.1% to $7.96, while Mainfreight decreased 2.5% to $66.69.

Local tech companies were mixed, with Gentrack down 1.2% at $4.07, Serko unchanged at $1.11, and Vista Group International gaining 0.7% to $2.75.

SkyCity Entertainment Group fell 1.5% to 67 cents, with 3.7 million shares traded in the heaviest volume for the day.

Contact Energy decreased 0.6% to $8.57 after the power company said it was considering an offer of up to $225 million in green capital bonds. If successful, Contact said it planned to redeem its $225 million green bond, due to reset its interest rate next month.

Exporters exposed to China were among the day’s biggest gainers, with Fonterra Shareholders’ Fund units up 2.4% at $9.37, the biggest gain on the NZX 50, while a2 Milk rose 1.3% to $8.50.

Freightways advanced 1.8% to $12.38, while Westpac Banking Corp and ANZ Group Holdings were both up 1.7% at $44.12 and $48.59 respectively.

The kiwi dollar traded at 56.56 US cents at 5pm from 56.52 cents last week after BNZ-BusinessNZ’s performance of services index showed activity continued to grow last month, while Stats NZ’s September merchandise trade figures showed more expensive fuel imports drove a widening of the trade deficit from a year earlier.

Craigs’ Sullivan said Stats NZ’s consumers price index figures on Thursday were the domestic highlight this week, while US earnings remained top of mind for investors.

Outside the benchmark index, Pacific Edge was unchanged at 23.5 cents, giving back earlier gains, after the bladder cancer detection firm said its Monitor and Triage products were set to benefit from proposed Medicare price increases of 35% and 39% respectively from next year, while its Cxbladder gained coverage in North and South Carolina at Blue Cross plans from November.

Steel & Tube Holdings slipped 3.3% to 29 cents after the steel products maker appointed former Perry Group chief Murray Gutry to its board, while Bremworth decreased 1.5% to 64 cents after appointing Allied Farmers chair Shelley Ruha as a director.

Reporting by Paul McBeth. Image from Curious News.