NZX50 slips as investors question early end to Iran conflict

New Zealand’s S&P/NZX 50 index had a late stumble to end the day in the red, having spent most of the day in positive territory as major nations mulled tapping strategic oil reserves and US President Donald Trump said the Iran conflict would end very soon, cooling the surge in Brent crude oil prices.

Air New Zealand reversed its momentum, ending the day softer after the national carrier withdrew earnings guidance for the June financial year over spiking jet fuel prices, and said it would hike airfares to help smooth the increased fuel bill.

Renewable power companies Meridian Energy and Mercury NZ, and logistics group Mainfreight were the biggest drags on the NZX50, while Argosy Property, Kiwi Property Group and Channel Infrastructure were among the decliners having shed rights to upcoming dividends.

And Serko rallied after the travel software developer talked up its push to harness artificial intelligence to drive new growth, and acknowledged its strong partnership with Booking.com at its showcase to investors.

Late stumble

The NZX50 index decreased 4.46 points to 13,094.37, with 25 stocks declining, 21 gaining, and four unchanged. Turnover across the main board was $173.4 million, of which Auckland International Airport accounted for almost $33 million as the country’s biggest gateway slipped 0.2% to $8.34.

Calm returned to markets after the Group of Seven advanced economies talked up the option to tap strategic reserves and US President Donald Trump said the Iran conflict would end soon, taking the steam out of surging oil prices. Brent crude oil futures fell 4.4% to US$94.63 a barrel at 5pm in Auckland.

Stock markets across Asia were broadly stronger, with Australia’s S&P/ASX 200 index up 0.7% in late trading, while Hong Kong’s Hang Seng gained 1.6% and Japan’s Nikkei 225 jumped 2.1%. Still, S&P 500 futures were down 0.5%.

“We’re getting soundbite-driven price action,” said Greg Smith, investment specialist at Generate Investment Management. “Things are going to remain quite fluid.”

Air New Zealand reversed earlier gains, falling 1.1% to 46.5 cents after the national carrier withdrew its annual earnings guidance over the spike in jet fuel prices, and flagged price hikes in response to the oil shock. The airline was the most heavily traded stock with a volume of 3.9 million shares changing hands.

Generate’s Smith said Air NZ had more hedging in place than in 2022 during the previous oil price spike when Russia invaded Ukraine.

Heavyweights

Among blue chip companies dragging on the NZX50, Mainfreight fell 2.8% to $60.58, while Meridian declined 1.5% to $5.39 and Mercury dipped 1.6% to $6.20.

Oceania Healthcare led decliners on the benchmark, falling 4.5% to 74.5 cents, while KMD Brands dropped 4.3% to a record-low 22.5 cents. Briscoe Group, which owns a stake of KMD, fell 1.5% to $4.63 ahead of its annual result on Wednesday.

Kiwi Property fell 2.6%, or 2.5 cents, to 94 cents after shedding rights to a 1.4 cents per share dividend, while Argosy declined 2.6%, or 3 cents, to $1.11 as it gave up rights to a 1.66 cent dividend. Channel Infrastructure slipped 1.8%, or 5 cents, to $2.69 as it went ex-dividend on a 6.75 cents per share payment.

Economic bellwether Freightways dipped 0.7% to $13.51 after ANZ’s monthly Truckometer gauge – measuring light and heavy traffic – showed the strongest annual growth in three years for light vehicle traffic, a good proxy for demand.

Serko rose 3.2% to $1.95 after the software company held an investor day in Auckland, lifting the midpoint of its income guidance for the March year, and talking up its partnership with Booking.com and its growing use of AI agents.

Westpac Banking Corp posted the biggest gain on the NZX50, up 4.9% at $49.50, with the Australian banks rallying across the Tasman.

Outside the benchmark index, Winton Land increased 0.8% to $1.98 after the property developer said its Sunfield site received fast-track approval.

The kiwi dollar held on to its gains through the day, trading at 59.10 US cents at 5pm in Auckland from 58.70 cents yesterday. The yield on New Zealand’s 10-year government bond fell 11 basis points to 4.58%.

Reporting by Paul McBeth. Image from Curious News.