New Zealand shares joined a global selloff as US President Donald Trump stuck to his original plans in levelling steep tariffs on his neighbours Canada and Mexico, reviving uncertainty among investors about their impact on the world economy.
The S&P/NZX 50 index fell for a second day, sliding 103.51 points, or 0.8%, to 12,446.54. Turnover across the main board was $133.1 million, with 94 stocks declining and 42 gaining.
Stock markets across Asia followed Wall Street lower after Trump reaffirmed the tariff levels, triggering threats of retaliation from Canada and China.
Australia’s S&P/ASX 200 index fell 0.7% in late trading, while Japan’s Nikkei 225 dropped 1.8% and Singapore’s Straits Times Index declined 0.4%.
“We had the Trump trade around the election and now we get the Trump fade,” said Peter McIntyre, an investment adviser at Craigs Investment Partners. “That’s flowed through into all Asian assets today.”
Fisher & Paykel Healthcare – one of the NZX’s more exposed exporters to the tariff regime – dropped 1.2% to $33.50 after Trump pressed ahead with plans to slap 25% tariffs on Mexico and Canada, citing the ongoing flow of fentanyl across the border for sticking with the rate.
The medical device maker lost a substantial shareholder from its register, with Hyperion Asset Management falling below the 5% threshold after selling about 3.1 million shares this year at an average price of $34.77.
Craigs’ McIntyre said trading was back to more normal levels after the MSCI index reweighting last week, where Contact Energy replaced Mercury NZ in the global index. Contact slipped 0.9% to $9.29, while Mercury declined 0.8% to $5.92.
The quarterly rebalancing for the NZX50 will be announced after trading closes at the end of the week, with retailer Warehouse Group at risk of dropping out in favour of Briscoe Group. Warehouse rose 1.1% to 92 cents, while Briscoe increased 0.7% to $4.50.
Booming AI
Infratil fell 2.1% to $10.30, taking its decline this year to 18%. The infrastructure investor had been one of investors’ favourites last year as its CDC Data Centres investment gave it exposure to the exploding artificial intelligence sector.
Across the Tasman, Blackstone chief Stephen Schwarzman told the AFR’s business summit that investing in data centre operator AirTrunk was one of the easiest cheques to write, while CDC chief Greg Boorer told the conference Australia needs to take more risks in its AI policy.
NZX led the benchmark index lower, falling 3.8% to $1.54, while Gentrack declined 2.7% to $11.07 and KMD Brands dropped 2.6% to 38 cents.
Summerset Group Holdings slipped 3.2% to $12.28 and Oceania Healthcare fell 3% to 64 cents. Ryman Healthcare declined 0.7% to $3.03, below its $3.05 offer price.
Craigs’ McIntyre said Ryman’s trading volumes were settling down after the placement component of its $1 billion capital raising and appeared better placed with its stronger balance sheet and refreshed board as the economy starts to revive.
Courier company Freightways – often seen as a bellwether for the domestic economy – rose 1.7% to $11.19 after Auckland mayor Wayne Brown and the Employers and Manufacturers Association got in behind a congestion charge for the country’s biggest city. A report commissioned by the mayor estimated congestion cost the city $2.6 billion a year in lost time and reduced business investment and consumer spending.
Auckland hospitality group Savor was unchanged at 20 cents.
Striding on
Stride Property posted the biggest gain on the NZX50, up 2.4% at $1.27, while Fonterra Shareholders’ Fund units advanced 2.1% to $5.34 and Tower increased 1.4% to $1.46.
Millennium & Copthorne Hotels New Zealand fell for a second day, sliding 7.8% to $2.25, the price currently offered by controlling shareholder City Developments Ltd to buy out the minority shareholders. The Singapore-listed company is embroiled in a boardroom stoush.
Santana Minerals was unchanged at 62 cents after the would-be gold miner’s latest estimates indicated more resources at a higher grade. Gold futures slipped 0.1% to US$2,899 an ounce at 5pm in Auckland.
Building materials firms were mixed after government figures showed permits for new residential housing rose 2.6% in January, slowing the annual pace of decline to 7.2%. Non-residential building consents were down 9.7% at $8.9 billion in 12 months ended Jan 31.
Fletcher Building fell 1.5% to $3.38 and Steel & Tube Holdings declined 2.4% to 82 cents, while Vulcan Steel rose 0.9% to $8.32 and Metro Performance Glass increased 1.9%, or 0.1 of a cent, to 5.5 cents.
Satish Ranchhod, a senior economist at Westpac NZ, said residential consent issuance will probably stay around these levels for a few months.
“We expect that new housing development will begin turning higher in the latter part of the year as the housing market strengthens,” he said in a note. “That combination of lower borrowing costs and a strengthening housing market will eventually support a lift in new housing development.”
The kiwi dollar traded at 56.03 US cents at 5pm in Auckland from 56.35 cents at 7 am and 56.02 cents yesterday.
Reporting by Paul McBeth. Image from Curious News.