NZX50 joins global rout as Fletcher, Westpac lead decline

New Zealand’s S&P/NZX 50 index joined a global rout to start the week as investors’ nerves were frayed by the prospect of the Middle East conflict dragging out, with Fletcher Building and Westpac Banking Corp leading the local bourse lower amid fears of the energy shock’s impact on the broader economy.

Transport and tourism stocks such as Air New Zealand, Napier Port and Freightways were among the decliners as the government prepares to move up the alert phases of its fuel plan if needed, with other nations looking at restrict driving and cut fuel taxes.

Meanwhile, NZX was among the few gainers on its own bourse after nailing down an April launch for its revived S&P/NZX 20 index futures product.

And contract labour firm Accordant Group is seeking to raise $6.7 million at a 50% discount to repay debt, while KMD Brands is still in a trading halt as it works to close its protracted capital raising.

A sea of red

The NZX50 dropped 186.47 points, or 1.4%, to 12,748.92, with 38 stocks declining, seven gaining, four unchanged and KMD Brands still in a trading halt as it works to settle a capital raising and refinancing. Turnover across the main board was $137.8 million, of which Auckland International Airport accounted for $19.6 million as it dipped 0.9% to $7.90.

The local bourse followed a soft cue from Wall Street on Friday as oil prices climbed and the volatility index spiked as investors grow increasingly pessimistic that the Middle East conflict will drag on, with Houthi rebels opening a new front on the Red Sea and US President Donald Trump reportedly weighing up a military operation to extract uranium from Iran.

The Polymarket prediction market is pricing in a 31% chance of a ceasefire by the end of April, while Brent crude oil futures rose 2.3% to US$107.78 a barrel at 5pm in Auckland.

That downbeat tone carried on into Asia, with Australia’s S&P/ASX 200 index down 0.9% in late trading, while Japan’s Nikkei 225 sank 3.4% and Hong Kong’s Hang Seng dropped 0.9%.

“Until there’s some closure there, and nobody really knows when or how it’s going to happen, the market will be uneasy,” said Peter McIntyre, an investment adviser at Craigs Investment Partners. “If troops are put on the ground, the market won’t like that at all.”

Fletcher Building led the NZX50 lower, falling 3.9% to $3 on a volume of 2.1 million shares, while Westpac slipped 3.8% to $46.69, Ryman Healthcare dropped 3.8% to $2.05 and Vulcan Steel slipped 3.7% to $6.31.

Craigs’ McIntyre said investors’ concerns are spreading to the impact on consumers and broader economy.

Meanwhile, New Zealand prime minister Christopher Luxon said the country’s fuel stocks remain strong – with an increase in cover for petrol, jet fuel and diesel from previous update – while acknowledging the government is prepared to move to phase two of the fuel plan if need be.

Building storage

Cabinet discussed commercial opportunities to firm up fuel security, with a proposal on increasing Channel Infrastructure’s capacity at Marsden Point near Whangārei going to ministers soon. Channel shares slipped 0.7% to $2.88.

Meanwhile, Australia halved its fuel excise and removed its heavy vehicle road user charge for three months, and South Korea may extend its driving restrictions as nations around the world grapple with the spike in oil prices.

Local travel and transport stocks were knocked, with Air NZ sliding 3.5% to 41.5 cents, Napier Port declining 3.4% to $3.38, Freightways slipping 2.6% to $11.98 and Port of Tauranga declining 2.3% to $7.75.

Index heavyweight Fisher & Paykel Healthcare took little comfort from the soft currency, with the kiwi trading at 57.38 US cents at 5pm from 57.72 cents last week. The medical device maker fell 2.9% to $36.12 on a relatively light turnover of $9.5 million.

Spark New Zealand was the most heavily traded stock on the day with a volume of almost 3 million shares, decreasing 1% to $2.04, having hit an 11-month low $2.01 during the session.

Summerset Group Holdings fell 3.4% to $9, with its board withdrawing a resolution to raise director fees at its upcoming annual meeting.

Travel software firm Serko posted the biggest gain on the benchmark index, up 4.2% at $1.60, rising for a third day.

Goodman Property Trust rose 2.4% to $1.895 ahead of its special meeting in Auckland to corporatise the unit trust and adopt a stapled structure for its securities.

NZX increased 0.8% to $1.31 after the stock market operator said it will launch its equities futures product on April 28, with BNP Paribas appointed as the designated market maker to support liquidity of the derivative.

Outside the benchmark index, Accordant dropped 20% to 24 cents after the contract labour firm said it plans to raise at least $5 million at 15 cents a share through renounceable rights offering, with the money tagged to repay debt.

Reporting by Paul McBeth. Image from Curious News.