NZX 50 snaps 3-day decline as exporters rally on subdued kiwi dollar

New Zealand’s S&P/NZX 50 index snapped a three-day decline as Fisher & Paykel Healthcare and other exporters were buoyed by a soft kiwi dollar, with Westpac NZ economists paring back their expectations for the Reserve Bank to hike interest rates.

Tourism Holdings led the benchmark higher after attracting a mystery suitor with a sweet offer to rival the Trouchet family and BGH Capital, which have yet to start their due diligence on the rental campervan operator.

Spark New Zealand recovered from a 15-year low after Jarden analysts raised their rating on the telco due to its recent price slump, while the energy sector remained broadly weaker on both sides of the Tasman as oil prices continued to decline.

And markets across Asia were mixed with Australia’s resources-heavy ASX knocked by the slide in gold prices, while tech-heavy bourses in South Korea and Japan rallied after Micron Technology’s stronger-than-expected revenue growth cooled fears about the pace of global artificial intelligence investment.

Cooler rate talk

The NZX 50 rose 92.39 points, or 0.7%, to 13,493.05, with 19 stocks gaining, 26 declining and five unchanged. The S&P/NZX 20 index futures contract for September rose 0.9% to 7,605, with 35 lots trading for a value of $266,000, while the NZX 20 advanced 0.6% to 7,623.9.

Turnover across the main board was $140.5 million, with F&P Healthcare accounting for $17.6 million as the medical device maker climbed 3.2% to $38.68, providing the biggest tailwind for the benchmark index.

Exporters were broadly stronger as the kiwi dollar traded at 56.48 US cents at 5pm in Auckland from 56.57 cents yesterday and down 5.7% so far this month. The a2 Milk Co gained 3.3% to $8.75 and Skellerup Holdings advanced 2.7% to $6.55.

“The market moves seem to be dominated by currency effects today, with Fisher & Paykel up 3%," said Oliver Mander, chief executive of the New Zealand Shareholders’ Association. “As a major component of the market, it’s underpinning the increase today.”

The local currency has been lagging against the greenback on growing expectations for the Federal Reserve to raise its key interest rate later this year, while pressure eased for New Zealand’s Reserve Bank to move aggressively.

Westpac NZ’s economists lowered their forecast for two hikes to the 2.25% official cash rate this year from a previous prediction of three, with the monetary policy committee staying on hold next month.

“We have reduced the forecast peak in the OCR to 4% and thus retain the same pattern of OCR changes through 2027,” Westpac’s NZ economists said in a note. “A lower peak OCR is consistent with the smaller and shorter duration oil related supply shock now assumed.”

Mining moves and AI themes

Stock markets across Asia were mixed, with Australia’s S&P/ASX 200 index falling 0.5% in late trading as the slump in gold prices overnight weighed on the resources-heavy bourse, while Japan’s Nikkei 225 jumped 3.9% and South Korea’s Kospi surged 5.9% after Micron’s stronger earnings result allayed fears about the pace of AI investment.

Rental campervan operator Tourism Holdings surged 13% to $2.89 to lead the NZX 50 higher on the day after saying it received a rival bid to the $3.10 indicative offer from the Trouchets and BGH. The unnamed suitor was granted due diligence for its indicative offer of $3.30-to-$3.40. Tourism Holdings was the most heavily traded stock on the day with a volume of 2.5 million shares, of which 2.15 million traded at $2.85 a share after the match period for clearing tomorrow.

Spark climbed 3.7% to $1.84 after Jarden analyst Arie Dekker raised his rating on the stock to ‘overweight’ from ‘neutral’, while keeping his target price at $2.27.

“Onus on Spark to lift confidence; we upgrade to overweight on a value case that better covers for lack of nearer-term catalysts,” Dekker said in a note to clients.

Power companies were weaker with Genesis Energy falling 2.3% to $2.55, Meridian Energy dipping 0.5% to $5.82, Contact Energy decreasing 0.3% to $9.39 and Mercury NZ slipping 0.3% to $6.83. Brent crude oil futures fell 1.5% to US$72.65 a barrel.

Air New Zealand missed the rally among airlines on the cheaper fuel, falling 2.2% to 44.5 cents.

KMD Brands posted the steepest decline on the day, falling 6.3%, or 0.5 of a cent, to 7.4 cents. The retailer will undertake a one-for-25 share consolidation next month.

Outside the benchmark index, Santana Minerals dropped 7.7% to 60 cents, with mining stocks hit on both sides of the Tasman due to the decline in gold prices. Separately, the would-be miner paused its consenting process to provide more data to regulators to support its application.

New Talisman Gold Mines jumped 20%, or 0.2 of a cent, to 1.2 cents, while Minerals Exploration gained 1.3% to 7.6 cents, Manuka Resources declined 2% to 9.6 cents and Taiko Critical Minerals slipped 1.7% to 29 cents.

Winton Land fell 2.6% to $1.48 after chair and chief executive Chris Meehan took leave from his executive role effective immediately due to ill health. The property developer said the leave was notified in the concluding stages of a board-led employment process with Meehan.

Reporting by Paul McBeth. Image from Curious News.