New Zealand shares ended a turbulent week on an upbeat note, snapping a three-day decline as The a2 Milk Co’s ascension to the top 10 index brought out buyers for the milk exporter and China’s central bank pledged to cut interest rates.
The S&P/NZX 50 index rose 57.2 points, or 0.5%, to 12,266.25, to end the week down 1.1%, as investors were gripped with fear that US President Donald Trump’s trade war might tip the world’s biggest economy into recession.
New Zealand’s benchmark index has so far avoided the correction felt in other jurisdictions - where markets are 10% below their peaks – but has declined for four straight weeks, its longest run since October 2023.
The improving sentiment crept across Asia as US policymakers avoided a federal government shutdown, removing one of the risks weighing on their minds, while Australian mining companies were buoyed by the rising price of gold, typically a place investors choose to park their money when uncertainty reigns. Gold futures rose 0.3% to US$3,001 an ounce, and Santana Minerals climbed 4.2% to 62.5 cents.
Chinese policy efforts to revive growth in the world’s second-biggest economy added to the improving mood, with the People’s Bank of China promising to cut interest rates.
“Investors are starting to look towards Europe with their large expansionary spending in rearming after the poor quarter in the US,” said Jeremy Sullivan, an investment adviser at Hamilton Hindin Greene. “There’s still plenty of opportunities.”
And that extends to New Zealand, where underlying economic data are pointing to a slow build up in domestic activity.
“The sun is starting to shine through.”
The kiwi dollar traded at 57.09 US cents at 5pm in Auckland from 56.97 cents at 7am, and down from 57.31 cents yesterday.
Frothy milk
A2 Milk – which counts China as a major market – led the local market higher today, climbing 7% to $9.45 on a volume of 877,000, while still carrying its maiden 8.5 cents per share dividend.
The milk marketing firm will replace Ryman Healthcare in the S&P/NZX 10 index later this month, meaning index tracking investors will have to add it to their portfolio.
Ryman climbed 2.5% to $2.91, with the allotment of new shares from its retail offering to start trading next week. Underwriters were left with 53 million shares, and will need to take some time offloading them to avoid influencing the company’s share price.
Domestic tech stocks were among the day’s bigger gains, with the sector having been punished this week in the global selloff.
Vista Group International gained 5.3% to $4, Serko gained 4.8% to $3.92 and Rakon advanced 3.9% to 54 cents.
Hallenstein Glasson Holdings fell 3% to $7.85, posting the biggest decline on the benchmark index, while Michael Hill International declined 3.2% to 45.5 cents and Warehouse Group slipped 1.1% to a record low close of 89 cents.
Spark New Zealand continued to plumb near 12-year lows, falling 2.3% to $2.16 on a volume of 4.5 million, the most for the day. The telco is also carrying a 12.5 cent dividend.
Metro Performance Glass increased 5.3%, or 0.3 of a cent, to 6 cents after it said rebuffed suitor Crescent Capital – which owns rival Viridian – plans to seek Commerce Commission approval to buy the business. Metroglass is still against the informal offer it received, saying it came with considerable uncertainty.
Reporting by Paul McBeth. Image from Curious News.