NZX50 edges higher in subdued holiday trading

New Zealand’s S&P/NZX 50 index staged a late recovery, buoyed by heavyweights Fisher & Paykel Healthcare, Ebos Group and Contact Energy, to end the session in positive territory, with Auckland anniversary and Australia Day public holidays keeping trading volumes light.

Stock markets across Asia were subdued as Japan’s Nikkei tumbled amid growing speculation authorities will intervene in currency markets after prime minister Sanae Takaichi warned her administration will respond to abnormal moves after a sharp spike in government bond yields and a slump in the yen.

Meanwhile, mining stocks across Asia rallied as gold futures burst through the US$5,000 mark, with Manuka Resources, New Talisman Mines and Minerals Exploration among the local junior miners to gain.

Still, Santana Minerals closed at a two-week low amid fears a decision on consenting its proposed open cast mine near Cromwell in Central Otago might face delays, even on the fast-track process.

Stock markets across Asia were subdued as Japan’s Nikkei tumbled.

Late gains

The NZX50 increased 12.5 points, or 0.1%, to 13,460.74, with 16 stocks gaining, 26 declining and eight unchanged. Turnover was a relatively light $54.5 million across the main board with trading desks in Auckland and across the Tasman closed for public holidays. Fisher & Paykel Healthcare accounted for $6.8m of that, rising 0.8% to $38.95.

The benchmark spent much of the day in negative territory, only to be buoyed in the match period at the end of the session, with index heavyweights lifting it higher. Ebos Group rose 1.4% to $26.89 and Contact Energy advanced 1.2% to $9.36, while SkyCity Entertainment Group led the NZX50, gaining 2.1% to 97 cents.

Stocks markets across Asia were generally weaker, with Japan’s Nikkei 225 down 1.9% in late trading amid growing speculation of an intervention by the government after prime minister Sanae Takaichi warned her administration will take “all necessary measures to address speculative and highly abnormal movements” during a televised debate on Sunday.

Rumours of intervention supported the yen on Friday in New York after the Bank of Japan’s governor Kazuo Ueda flagged a possible response to surging bond yields, gaining momentum on Monday after Takaichi’s comments.

The kiwi dollar fell to 91.89 yen at 5pm in Auckland from 93.72 yen last week, and gained against a broadly weaker greenback, trading at 59.59 US cents from 59.08 cents.

It’s precious

Still, mining stocks across Asia continued to rally as gold futures rose 1.8% to US$5,069 an ounce at 5pm in Auckland. The NZX’s junior miners were broadly stronger, with Manuka Resources surging 13% to 27 cents, while New Talisman Gold Mines gained 4.6%, or 0.1 of a cent, to 2.3 cents and Minerals Exploration gained 1.8% to 29 cents.

Santana Minerals bucked the trend, sliding 14% to $1.16, its lowest closing price in two weeks. The would-be gold miner’s proposed site near Cromwell is facing a longer consenting process than the already extended 60 days, with officials indicating it could be more than twice that.

Among decliners on the NZX50, Briscoe Group posted the biggest fall, sliding 2.5% to $5.01, while Meridian Energy decreased 1.8% to $5.60 and ANZ Group Holdings slipped 1.7% to $41.40.

Vector shed 1.2% to $4.84 after Forsyth Barr analysts reaffirmed their ‘outperform’ rating on the stock and maintained a price target of $5.12, saying the latest operating metrics were in line with their expectations.

“Electricity throughput and connection growth were positive, although weather was a key driver of throughput growth and the earnings impact is modest given the mechanics of Vector’s regulatory regime,” analysts Andrew Harvey-Green and Hugh Lockwood said in a note to clients. “Gas connections and throughput continue to decline which, while a long-term headwind, should be largely offset by customers switching to electricity from gas over time.”

The analysts said they expect a strong first-half result when the lines company reports on Feb 20, underpinned by material increases in the regulated electricity price.

Reporting by Paul McBeth.