Mainfreight led the local market higher as New Zealand’s stock market joined a rally across Asia on optimism US and Chinese officials will deliver a meaningful trade deal when all is revealed on Monday in the US.
The kiwi dollar held on to its gains amid the improved investment sentiment, although exporters Fisher & Paykel Healthcare and a2 Milk Co were among the few companies to decline.
Meanwhile, Contact Energy and Manawa Energy advanced having all-but sewn up their merger after securing the Commerce Commission’s approval last week.
And Gentrack declined ahead of its earnings announcement next week after Forsyth Barr noted a risk to revenue if the software firm hasn’t locked in contracts as expected.
Asian rally
The S&P/NZX 50 index rose 71.69 points, or 0.6%, to 12,676.75, with 34 gainers, nine decliners, and seven stocks unchanged. Turnover across the main board was $100.9 million.
“Our market was helped by the favourable tone that China and the US get to a reasonable trade deal,” said Peter McIntyre, an investment adviser at Craigs Investment Partners. “Most of Asia’s travelling in the green.”
Australia’s S&P/ASX 200 index was up 0.2% in late trading, while Japan’s Nikkei 225 index increased 0.2%. Hong Kong’s Hang Seng climbed 1%, with the bourse also attracting its biggest listing of the year as China’s battery maker CATL seeks to raise at least HK$31.01 billion.
New Zealand’s stock market operator NZX fell 2.5% to $1.54, while Australia’s ASX was down 1.8%.
Meanwhile, India’s Nifty 50 climbed 2.9% after a ceasefire was brokered between India and Pakistan.
Craigs’ McIntyre said the tensions between India and Pakistan hadn’t filtered into markets, but an escalation of the conflict could have seen it do so.
Mainfreight led the NZX50, climbing 5.1% to $66, its highest close since March 20.
Manawa gained 4% to $6.51 and Contact was up 3.8% at $9.50, outperforming other energy companies, with Meridian Energy up 1.4% at $5.88 and Mercury NZ advancing 0.7% to $6.16.
Time to report
Warehouse Group gained 2.5% to 81 cents, having reported stronger sales than expected last week, while Sanford increased 2.9% to $4.94 ahead of the fishing group’s first-half result on Thursday.
Ebos Group was unchanged at $38.90 after closing the A$54 million retail component of its A$200 million capital raising oversubscribed.
Vulcan Steel posted the biggest decline on the NZX50, falling 3.2% to $7.55, while F&P Healthcare declined 2.1% to $35.20 and a2 Milk slipped 0.3% to $9.07. The kiwi dollar traded at 59.27 US cents at 5pm in Auckland from 59.09 cents at 7am and 58.97 cents last week.
Gentrack decreased 1.4% to $12.25 after Forsyth Barr analyst James Lindsay said the utilities software maker faces a downside risk to revenue if it doesn’t secure material contract wins.
Lindsay said he expects Gentrack to retain its medium-term growth guidance, and has a target price of $14.90 on the company, with an ‘outperform’ rating.
SkyCity Entertainment Group was the most heavily traded stock, falling 1% to $1.04 on a volume of 3.9 million shares. Kiwi Property Group rose 2.3% to 90 cents on a volume of 2.4 million while Spark New Zealand was unchanged at $2.21 with 2.4 million shares changing hands.
Reporting by Paul McBeth. Image from Bernd 📷 Dittrich on Unsplash.
This story has been updated to correct Sanford's reporting date.