NZX50 posts 0.4% weekly decline as rate cut exuberance wears thin
Fletcher Building was among those that keenly felt the soft week.
New Zealand’s S&P/NZX 50 index fell 0.4% this week as optimism about the Reserve Bank’s bigger rate cut than expected wore off in a global malaise, with markets around the world cooling from record highs with a tempering of some of the exuberance around artificial intelligence.
Fisher & Paykel Healthcare led the benchmark index lower on Friday in its biggest one-day slide in more than two weeks, with overseas-exposed firms such as Sanford and Mainfreight among those pacing declines on the day.
Meanwhile, Chorus nudged lower after finance minister Nicola Willis and infrastructure minister Chris Bishop said the government’s weighing up selling the debt and equity securities it holds in the broadband network operator that helped fund the national rollout of fibre services.
And stock market operator NZX was on the green side of the ledger after prime minister Christopher Luxon’s meeting with Singaporean counterpart Lawrence Wong included plans to expand capital markets collaboration in the deepening of the nations’ relations.
Ebbing tides
The NZX50 dropped 103.6 points, or 0.8%, to 13,467.26 on Friday, with 24 stocks declining, 19 gaining and seven unchanged. Turnover was $118.9 million across the main board, of which Fisher & Paykel Healthcare accounted for $12.7 million as the country’s biggest listed company led the benchmark lower, falling 3.5% to $36.25.
The medical device maker was among a handful of export-focused companies weighing on the bourse today, with logistics group Mainfreight falling 2.9% to $60.68, fish exporter Sanford declining 2.7% to $5.73 and Tourism Holdings sliding 2.2% to $2.62.
Stock markets across Asia were broadly weaker with tech stocks again coming under pressure, following Wall Street lower from its recent peaks as investors digested the impact of Israel’s peace deal with Hamas and the extended US federal government shutdown. Australia’s S&P/ASX 200 index was down 0.2% in late trading, while Hong Kong’s Hang Seng and Japan’s Nikkei 225 both fell 1.1%.
New Zealand’s benchmark drifted from its 2025 high on Wednesday, when the Reserve Bank went with the larger half-percentage point cut to the official cash rate, surprising many in the market who’d predicted a more modest reduction.
Fletcher Building fell 1.8% to $3.29, taking its weekly decline to 5.5%, while Channel Infrastructure’s 1.5% slide to $2.62 took its weekly drop to 4.7%. Both companies had enjoyed strong rallies heading into the rate review, and had breached technical levels on a relative strength basis often seen as a turning point for assets.
“The euphoria has eased from the RBNZ decision and things have softened a bit,” said Greg Smith, investment specialist at Generate Investment Management. “It’s been pretty quiet in the last couple of days, with the peace deal in Gaza and ongoing shutdown in the US, but the start of quarterly earnings season in the US kicks off next week with the big US banks to give a sense of how the economy is faring.”
Grounded kiwi
The kiwi dollar remained on the backfoot, trading at 57.56 US cents at 5pm in Auckland from 57.45 cents at 7am, and down from 58.01 cents yesterday
The Bank of New Zealand-BusinessNZ performance of manufacturing index showed industrial activity remained just in contractionary territory with an unchanged reading of 49.9, with employment the key sub-index weighing on the measure.
Apple exporter Scales Corp posted the biggest gain on the NZX50 today, rising 3% to $5.89, while Fonterra Shareholders’ Fund units advanced 1.4% to $8.21 and infant formula marketer a2 Milk Co increased 0.6% to $10.21. Outside the benchmark, PGG Wrightson surged 7.1% to $2.57 ahead of its annual meeting next week.
Chorus dipped 0.1% to $9.25 after the government said it’s weighing up options for the debt and equity securities it holds in the telecommunications network operator, that have been used to fund the firm’s expanding national fibre footprint. Spark New Zealand rose 0.8% to $2.44.
NZX gained 0.7% to $1.49 after prime ministers Christopher Luxon and Lawrence Wong committed to exploring expanding capital markets collaboration in their joint statement on deepening New Zealand’s relationship with Singapore.
Vital Healthcare Property Trust increased 0.4% to $2.34. Health minister Simeon Brown kicked off a procurement process to secure land for a new health precinct in Drury, south of Auckland.
Reporting by Paul McBeth. Image from Curious News.
