Fletcher rallied after agreeing to sell its major construction arm.
A late flurry for heavyweights Meridian Energy and Auckland International Airport failed to drag New Zealand’s S&P/NZX 50 index into positive territory, with the benchmark index falling for a second day with investors still on edge about the deepening rift between the US and Europe after President Donald Trump upped the ante over the future of Greenland with his weekend tariff threat.
Investor sentiment remained weak across Asia as US markets were closed for the Martin Luther King Jr Day public holiday, with Australia’s resources heavy market on the red side of the ledger and Japan’s Nikkei sliding after prime minister Sanae Takaichi confirmed speculation she will dissolve parliament and hold a snap election early next month.
Meanwhile, Fletcher Building rallied after the building materials firm agreed to sell its major construction arm to French giant Vinci for $315.6 million.
And the kiwi dollar rose above 58 US cents for the first time this year as the BNZ-BusinessNZ performance of services index showed activity in the services sector expanded for the first time in almost two years.
The NZX50 decreased 6.56 points, or 0.1%, to 13,573.93, with 29 stocks declining, 17 gaining and four unchanged. Turnover across the main board was $158.3 million, of which Ebos Group accounted for $38.9 million as it advanced 0.3% to $26.20.
The healthcare products maker had a large line of stock change hands for a second day in a row, with a single trade of more than 1.2 million shares at $26 each accounting for $32.2 million of the daily turnover.
Vulcan Steel led the benchmark lower, falling 4.2% to $8.27, while heavyweights Infratil and Spark New Zealand paced those declines as the former slipped 1.2% to $11.15 and the latter was down 2.2% at $2.27.
Stock markets across Asia were broadly weaker as investors remained unnerved by the heightened tensions between the US and Europe, with President Donald Trump threatening to impose tariffs on eight nations if they don’t acquiesce to his push for the US to acquire Greenland.
“The concern that the trade agreement last August between the US and Europe might unravel is what’s impacting sentiment,” said Greg Smith, investment specialist at Generate Investment Management. “Markets don’t like uncertainty and that’s a big one.”
Australia’s S&P/ASX 200 index was down 0.6% in late trading and Hong Kong’s Hang Seng was marginally weaker. Meanwhile, Japan’s Nikkei 225 index dropped from its record highs, sliding 1.2% after prime minister Sanae Takaichi said she will dissolve parliament and hold a snap election on Feb 8, with plans to extend her fiscal stimulus.
The kiwi dollar climbed to 91.99 yen at 5pm in Auckland from 91.10 yen yesterday, even as the yield on Japan’s 40-year government bonds rose to 4%, the highest level since its debut in 2007.
The kiwi dollar was stronger against most of its major trading partners, rising to 58.23 US cents from 57.70 cents yesterday and advancing to 86.56 Australian cents from 86.28 cents after the BNZ-BusinessNZ performance of services index showed the sector’s activity grew in December in its first monthly expansion in almost two years and its strongest reading since June 2023.
Summerset Group Holdings gave up earlier gains to end the day down 0.3% at $12.22 after reporting a 26% increase in annual sales of occupation rights and preselling half its second village in Australia. Ryman Healthcare gained 2.1% to $2.98 and Oceania Healthcare increased 1.2% to 87 cents.
Fletcher Building posted the biggest gain on the day, up 2.4% at $3.89 after the building materials firm said it’s agreed to sell its major construction unit to France’s Vinci for $315.6 million. Vinci bought New Zealand’s HEB Construction in 2015 for €43 million.
Generate’s Smith said the deal was broadly positive for Fletcher and paves the way for it to resume paying dividends in the June 2027 financial year.
Meridian Energy added a late tailwind to the NZX50, rising 1.8% to $5.69, while Auckland International Airport gained 1.2% to $8.48 and Port of Tauranga advanced 1.2% to $8.20.
Outside the benchmark index, Pacific Edge was the most heavily traded stock on the day with a volume of 5.2 million shares as it fell 2.7% to 18.3 cents after saying total lab throughput fell 13% in the December quarter, and that it’s next hearing to regain Medicare coverage will be in February.
Junior miners were mixed as gold futures extended their run higher, up 2% at US$4,685 an ounce at 5pm in Auckland. Manuka Resources dropped 6.5% to 18.6 cents and Minerals Exploration was down 3.5% at 28 cents, while Santana Minerals gained 0.8% to $1.345. New Talisman Gold Mines was unchanged at 2.3 cents.
Reporting by Paul McBeth.
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