New Zealand’s S&P/NZX 50 index rose for a second week, joining a global rally in stock markets as investors ramp up bets for the US Federal Reserve to cut interest rates next month.
KMD Brands led the local bourse higher on the day, shrugging off soft migration data undermining consumer spending, while Vulcan Steel rose for a fourth day having signalled winds of change in global steel markets.
Eroad rose for a third day as it continued to enjoy the prospect of New Zealand’s adoption of digital road user charging, with founder Steve Newman taking advantage of the recent rally to sell down below the substantial shareholder threshold.
And Hapag-Lloyd’s gloomy outlook on global trade weighed on local ports and logistics, with Mainfreight, Port of Tauranga and Napier Port all on the red side of the ledger.
Golden days
The NZX50 rose 0.4% this week – its second in a row – joining stock markets around the world in rallying on the prospect of rate cuts in the US after soft consumer inflation figures removed a potential obstacle to the Federal Reserve.
The Reserve Bank of Australia cut the target cash rate a quarter-point to 3.6% this week, while New Zealand’s central bank is expected to lower the official cash rate 25 basis points to 3% when it reviews policy next week.
The kiwi dollar fell to 59.21 US cents at 5pm in Auckland from 59.76 cents yesterday.
The NZX 50 rose 55.3 points, or 0.4%, to 12,889.38, with 28 stocks gaining, 15 stocks falling and seven unchanged. Turnover was fairly subdued $79.6 million.
Heavyweights Infratil and Auckland International Airport paced gains on the local bourse, rising 1.4% to $11.94 and 1.1% to $7.70 respectively.
KMD Brands led the benchmark index higher, climbing 4.2%, or 1 cent, to 25 cents. Retailers were mixed after Statistics New Zealand data showing net migration fell to a fresh two-and-a-half year low as the number of Kiwis seeking opportunities abroad remains elevated.
“PLT (permanent long-term) departures remain close to record highs with fewer arrivals to NZ reflective of the relatively weak position of the NZ economy,” ASB Bank senior economist Mark Smith said in a note. “Little wonder that consumer spending and the housing market is failing to fire despite 225 basis points of OCR cuts.”
Briscoe Group increased 0.7% to $5.64 and Hallenstein Glasson Holdings dipped 0.1% to $8.24. Outside the benchmark, Warehouse Group rose 1.3% to 81 cents and Michael Hill International fell 2.2% to 44.5 cents.
Blue steel
Vulcan Steel rose for a fourth day, up 3.6% to $7.29, extending its rally after saying it was seeing signs of a turn in the steel market. Steel & Tube rose 1.4% to 71 cents, while Chinese industrial production data showed steel output shrank in July as weather affected operations and the government ramped up efforts to rein in overcapacity in the sector.
Serko posted the biggest decline on the NZX50, falling 4.2% to $2.50, while Vista Group International declined for a fourth day, down 1.9% at $3.14 after the cinema analytics firm trimmed its annual revenue outlook and ramped up spending plans to accelerate the migration to its cloud product.
Mainfreight declined 0.6% to $59.57, while Port of Tauranga fell 1.8% to $6.92 and Napier Port slipped 1.6% to $3.03 after global shipping giant Hapag-Lloyd warned of a slowing outlook for international trade.
Meridian Energy decreased 0.5% to $5.56 after saying national hydro storage shrank to 87% of the historical average at the start of August from 104% a month earlier.
Argosy Property was the most heavily traded stock on the day with a volume of 997,000 shares as it increased 0.4% to $1.18.
Outside the benchmark index, Eroad rose 1.3% to $2.31 as it continued to enjoy swelling demand after the government’s plans to dump petrol tax for a road user charge supported by digital monitoring. Founder Steve Newman, who stepped down as chief executive in 2022, dropped below the 5% substantial shareholder threshold after selling 2 million shares this week for A$3.8 million, or A$1.90 a share.
Reporting by Paul McBeth. Image from Curious News.
