New Zealand’s S&P/NZX 50 index jumped 0.9% as it joined the global rally on optimism that US President Donald Trump’s trade vendetta against the world has eased after the reprieve that was reached with arch-rival China.
Companies that had been the hardest hit by the prospect of the tariff escalation posted the strongest gains, with Serko, Mainfreight, Skellerup Holdings and Fisher & Paykel Healthcare among the leaders.
Power companies were broadly weaker after Meridian Energy picked up minnow retailer Flick Electric’s customer book, and as associate energy minister Shane Jones ratcheted up the rhetoric about restructuring the electricity market.
Meanwhile, ikeGPS posted the biggest gain on the day as it climbed to a two-year high, with heavier trading than usual.
A lot going on
The NZX50 gained 109.99 points to 12,786.74, with 33 stocks rising, 13 declining and four unchanged. Turnover across the main board was busier than normal at $208.8 million, with F&P Healthcare accounting for $25.6 million of that.
The local bourse was one of the stronger performers in Asia after the US and China found common ground in reducing their punitive tariffs on one another while they spend the next 90 days trying to hash out a more fulsome trade agreement.
Japan’s Nikkei 225 index was up 1.8% in afternoon trading, while Australia’s S&P/ASX 200 index gained 0.3% and Hong Kong’s Hang Seng fell 1.6%.
“There was some positivity around the UK trade deal last week, but the big kahuna was always going to be China,” said Greg Smith, head of retail at Devon Funds Management. “It’s got rid of a little uncertainty, but the devil will be in the detail as always.”
Companies that have been beat up by the prospect of cooling international trade and travel were among the day’s biggest gainers.
Online travel management firm Serko led the NZX50 higher, climbing 6% to $3.36, while logistics group Mainfreight rose 4.2% to $68.80, Skellerup gained 4.2% to $4.74 and F&P Healthcare advanced 2.8% to $36.20.
A falling feather
A softer kiwi dollar also helped those exporters, with the currency trading at 58.89 US cents 5pm in Auckland from 59.27 cents yesterday. It pared some of its earlier losses, as swap rates crept higher.
Courier operator Freightways gained 4% to $10.60 after ANZ’s monthly truckometer gauge of traffic indicated a pick-up in demand and the continuation of the gradual economic recovery.
Vista Group International rose 2.8% to $3.65 after signing Picturehouse Cinemas’ 25 sites in the UK to its cloud product.
Meridian Energy declined 1.4% to $5.80 after buying Flick Electric’s customer book for $70 million from Ampol’s Z Energy division.
“Relative to their generation they lag the others in terms of their retail customers, so it adds to that although it’s not material,” Devon’s Smith said.
A familiar complaint
Power companies were generally weaker as rising swap rates and the prospect of less aggressive interest rate cuts sapped the yield appeal of the utilities, while NZ First MP Shane Jones also used polling results showing escalating customer concerns about electricity bills to advocate for more radical changes to the sector.
Contact dropped 2% to $9.31, posting the biggest decline on the day, while Mercury NZ decreased 1% to $6.10 and Manawa Energy slipped 0.6% to $6.47.
The higher swap rates also weighed on property companies, with Vital Healthcare Property Trust down 0.5% at $1.93, Goodman Property Trust declining 0.5% to $1.96 and Precinct Properties NZ falling 0.4% to $1.185.
Ryman Healthcare was the most heavily traded stock on a volume of 3.6 million, rising 0.4% to $2.47.
Outside the benchmark index, ikeGPS jumped 8% to 95 cents, its highest level since March 2023, on a volume of 375,000, its heaviest day of trading since Feb 10.
Reporting by Paul McBeth. Image from Erim Berk Benli on Unsplash.
