Investors are waking up to the new week with a spring in their step after Wall Street’s rally on Friday, with a whiff of takeovers in the air.
Payments firm Smartpay has attracted an offer of $1 a share from larger rival Tyro Payments, according to a report in the Australian Financial Review’s Street Talk column over the weekend. That’s a 59% premium to its 63 cents closing price on Friday, with the eftpos terminal provider tumbling last year as regulators on both sides of the Tasman have payments surcharges in their sights.
That comes as investor sentiment recovers from last week’s slump over heightened fears about US trade policy and the prospect of the world’s biggest economy slipping into a recession.
New Zealand prime minister Christopher Luxon announced the start to formal free trade negotiations with India on his trip to the world’s most populous nation, saying it’s pivotal in his administration’s goal to double exports by value over the next decade. Talks start next month.
Meanwhile, US secretary of state Marco Rubio said the world’s biggest economy might start bilateral trade talks once its programme of levelling tariffs has reset relations with its global partners.
And South Korea’s trade minister Cheong In-kyo said the US wants better access to Asia’s fourth biggest economy, particularly in the agriculture and tech sectors. Cheong travelled to Washington seeking an exemption from America’s tariff regime.
Overdone
Stocks on Wall Street and in Europe rallied on Friday, with the Nasdaq Composite climbing 2.6% in its biggest gain since the re-election of Donald Trump to the White House, and shaking off a weak US consumer sentiment survey.
“Economic policy uncertainty and the pullback in equity indices have undermined confidence amongst consumers,” Bank of New Zealand senior interest rate strategist Stuart Ritson said in a note. “There was a large fall in the expectations component, which has a closer relationship with spending, than the headline index.”
Germany’s DAX 30 climbed 1.9% as the presumptive incoming government secured backing from the Green party for its plans to boost infrastructure and defence spending.
That positive sentiment is pointing to a strong day in Australia with futures indicating a 1.1% gain for the S&P/ASX 200 index, while the kiwi dollar climbed to 57.41 US cents at 7am in Auckland from 57.09 cents on Friday.
Local data today include the BNZ-Business NZ performance of services index, after its sister manufacturing survey on Friday showed industrial activity continued to expand in February.
Statistics New Zealand releases December quarter gross domestic product figures on Thursday, which is expected to show the economy climbed out of recession in the final three months of 2024.
And Fonterra Cooperative Group will report its first-half earnings on Thursday, having raised annual earnings guidance earlier this month. Warehouse Group is scheduled to report on Friday, having already warned a weak result was on the cards.
Reporting by Paul McBeth. Image from Anne Nygård on Unsplash.