US President Donald Trump’s decision on how involved to get in the Israel-Iran conflict loomed over Asian markets today, with the S&P/NZX 50 index slipping for a second day in fairly muted trading.
Upcoming index tweaks drove some of the bigger movements with Warehouse Group leading the NZX50 lower before it leaves the top 50, while Gentrack posted the biggest gain ahead of joining the top 20 group.
Manawa Energy shareholders voted in favour of Contact Energy’s acquisition of the electricity generator, with the scheme of arrangement expected to come into effect early next month.
And Statistics New Zealand is in for a major shakeup with the country moving away from the five-yearly census from 2030, replacing the national collection with administrative data collected from other government agencies, while also getting funding to move to monthly inflation surveys from 2027.
The fog of war
The NZX50 slipped 12.03 points, or 0.1%, to 12,627.32, with 24 stocks declining, 22 gaining, and four unchanged. Turnover across the main board was $138.5 million, with the Smart NZ Property exchange traded fund the most heavily traded stock on a volume of 4.2 million units as it fell 0.6% to $1.057.
Stock markets across Asia were broadly weaker as Australia’s S&P/ASX 200 index dipped 0.1% in late trading, while Singapore’s Straits Times Index fell 0.4% and Hong Kong’s Hang Seng dropped 1.1%. Japan’s Nikkei 225 was among the few gainers, up 0.8%.
Investors were spooked by the ratcheting up of tensions between Iran and Israel, with US President Donald Trump weighing up options on how to address Iran’s nuclear ambitions, with a US strike said to be among those on the table.
The kiwi dollar traded at 60.33 US cents at 5pm in Auckland from 60.13 cents at 7am, down from 60.68 cents yesterday. Brent crude oil futures came off earlier highs, recently at US$76.26 a barrel.
“The macro risks are certainly the overarching thing going on in markets,” said Matt Goodson, managing director at Salt Funds Management. “All eyes are peeled to see if the US joins in some way, but the endgame is very unclear.”
Getting ready
Goodson said there might also be some positioning ahead of the index reweightings that come into effect at the end of trading on Thursday, with New Zealand’s markets closed on Friday for the Matariki public holiday.
Warehouse led the NZX50 lower, falling 3.6% to 81 cents before its exit from the benchmark index at the close of trading on Thursday. SkyCity Entertainment Group declined 2.1% to 92 cents ahead of its departure from the NZX20, while its replacement, Gentrack, posted the biggest gain on the top 50 index, rising 4.7% to $11.62.
And outside the benchmark, Briscoe Group, climbed 3.8% to $6.23 ahead of joining the NZX50.
Manawa Energy rose 0.5% to $6.39 after its shareholders voted in favour of a scheme for Contact Energy to takeover the electricity generator. Contact slipped 1.2% to $9.06, while Meridian Energy declined 2.1% to $5.70 and Mercury NZ fell 1.7% to $5.925. Genesis Energy decreased 0.9% to $2.28.
NZX declined 0.7% to $1.50 after getting a clean bill of health from the Financial Markets Authority in its annual licence review.
Outside the NZX50, Scott Technology rose 6.1% to $1.91 after securing $27 million of new global automation contracts. The robotics firm said its trading revenue was down 7% in the year-to-date, although earnings were tracking ahead of the prior period.
Statistics New Zealand figures showed the annual current account deficit narrowed to $24.7 billion, or 5.7% of gross domestic product, in the March quarter, from $27.6 billion, or 6.6% of GDP, a year earlier. That was slightly smaller than expected.
Meanwhile, statistics minister Shane Reti said the government agency will stop the five-yearly census from 2030, adopting the use of administrative data from other government agencies supported by smaller annual surveys and targeted data collection.
Stats NZ has also been given funding to move to monthly consumers price index releases from 2027 from the current quarterly cycle.
Reporting by Paul McBeth. Image from Joshua Mayo on Unsplash.
