The early data gave economists something to be upbeat about.
New Zealand’s S&P/NZX 50 index ended the week in positive territory as Fletcher Building led the benchmark higher on Friday after the strongest manufacturing activity reading in four years, and as Contact Energy and Meridian Energy came in for heavy trading after a clean energy index rebalancing.
ANZ Group Holdings posted the biggest weekly gain on the top 50, with the lender getting upgraded to a ‘buy’ by Citigroup analysts, and as better-than-expected earnings from Goldman Sachs and Morgan Stanley sparked a recovery in financial stocks on Wall Street overnight after a cool sentiment towards the sector through much of the week.
Ryman Healthcare was at the bottom of the leaderboard on Friday as Forsyth Barr analysts kept their ‘neutral’ rating and target price on the retirement village operator unchanged after its trading update on Thursday, while Macquarie nudged up its target price on the stock.
Meanwhile, the kiwi dollar is heading for its first weekly gain against the Aussie since mid-December as a string of economic data show New Zealand might be poised to grow faster than some analysts were picking, potentially pushing the Reserve Bank to move earlier on interest rates than it intends.
The NZX50 climbed 58.31 points, or 0.4%, to 13,718.1 on Friday, with 28 stocks gaining, 12 declining, and 10 unchanged.
That took its weekly gain to 0.2%, extending the run to four weeks, with ANZ leading the benchmark higher as it rose 5.2% to $43.41 across the five days. The lender was upgraded to a ‘buy’ by Citi analysts on Thursday in a mixed week for financial stocks as softer-than-expected earnings by Wall Street giant JPMorgan Chase and US President Donald Trump’s plans to cap credit card interest rates sapped demand for the sector worldwide.
That reversed overnight after upbeat results from Goldman Sachs and Morgan Stanley, with ANZ gaining 1% on Friday, while Westpac Banking Corp climbed 2.8% to $45.73 and Heartland Group Holdings advanced 0.8% to $1.205.
Friday trading was busier than usual with the S&P clean energy exchange index rebalancing coming into effect. Turnover across the main board was $171.9 million, of which Contact Energy accounted for $27.1 million as it rose 1.1% to $9.36, while Meridian Energy accounted for $24 million, rising 1.3% to $5.59.
Fletcher Building led the top 50 higher, advancing 3.2% to $3.89 after the BNZ-BusinessNZ performance of manufacturing index showed industrial activity at its highest rate in four years.
“PMI improvement was strongest in industries aligned with the construction cycle and primary sectors like non-metallic mineral and metal product manufacturing, and food processing sectors,” Bank of New Zealand senior economist Doug Steel said in a note. “All up, the PMI could ease back a bit over coming months and still signal trend improvement.”
Industrial property landlord Property for Industry gained 2.5% to $2.42, while healthcare products maker Ebos Group advanced 1.1% to $26.46 and rubber goods maker Skellerup Holdings increased 0.2% to $5.23.
Local tech stocks followed a strong lead on Wall Street after Taiwan Semiconductor Manufacturing Co’s earnings revived optimism about the artificial intelligence sector. Gentrack gained 2.3% to $8.46, while Vista Group International rose 2.3% to $2.25.
Ryman Healthcare posted the biggest fall on the day, down 2.7% at $2.89, and on the heaviest volume of 4.3 million shares.
The retirement village operator’s target price was nudged up 0.3% to $3.02 by Macquarie analysts, while Forsyth Barr’s research team kept their target at $3.25 and held their ‘neutral’ rating, saying the company’s trading update this week was in line with their expectations.
Oceania Healthcare dipped 1.7% to 88 cents, while Summerset Group Holdings rose 1.8% to $12.40.
The kiwi dollar rose to 57.57 US cents at 5pm in Auckland from 57.35 cents yesterday and is on track to post a 0.5% gain on the week, following a series of upbeat economic data pointing to more robust growth than some economists were picking.
The kiwi clawed back overnight losses against the Aussie to trade at 85.88 Australian cents from 85.67 cents yesterday, and is on track to snap four weekly declines against its trans-Tasman counterpart.
Statistics New Zealand figures today showed selected prices – including food – rose 1.3% in December, indicating some upside for the quarterly inflation figures. ASB Bank economist Mark Smith noted that could put the Reserve Bank under pressure to hike the official cash rate if prices start rising too quickly.
“We don’t envisage the RBNZ will be in a rush to change the 2.25% OCR and have pencilled in 50 basis points of OCR tightening from early 2027,” Smith said in a note. “We caution that the RBNZ may step in if the NZ economy heats up too quickly and inflation remains stuck around 3%.”
Reporting by Paul McBeth.
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