Vulcan led the benchmark higher on its latest broker upgrade.
New Zealand’s S&P/NZX 50 index joined a broadly stronger day across Asia as investors shake off the last vestiges of last week’s nerves about artificial intelligence coming for the software sector, while the domestic earnings season and a Reserve Bank rate review draw nearer.
Vulcan Steel led the benchmark higher after the steel products maker got upgraded by UBS analysts, with building materials firm Fletcher Building joining it on the green side of the ledger.
Japan’s Nikkei 225 continued its ascent into record territory after prime minister Sanae Takaichi’s bet on a snap election paid dividends in delivering her Liberal Democratic Party a supermajority, freeing up the government’s spending plans.
And local carpetmaker Bremworth tumbled after saying shareholders can expect a smaller return from its insurance proceeds if its bid to sell the business to rival Godfrey Hirst’s parent gets over the line after tougher trading conditions ate into its cash reserves.
The NZX50 rose 67.31 points, or 0.5%, to 13,513.68, with 24 stocks gaining, 20 declining, and six unchanged. Turnover across the main board was $123.6 million, of which Auckland International Airport accounted for $13.3 million, as it increased 0.1% to $8.53.
The local bourse was buoyed by its blue chip stocks, with Fisher & Paykel Healthcare advancing 1.8% to $39.98, Infratil up 1.3% at $11.18 and Contact Energy increasing 0.5% to $9.65.
That was in a broadly stronger day across Asia, with Australia’s S&P/ASX up 0.1% in late trading, while Hong Kong’s Hang Seng gained 0.5% and Japan’s Nikkei 225 extended its rally on prime minister Sanae Takaichi’s LDP party securing the biggest post-war majority in her snap election over the weekend, with the bourse jumping 2.4%.
The Smart Asia Pacific exchange traded fund rose 0.3% to $3.477, adding to its 3.8% gain on Monday.
Locally, investors are turning their mind to the upcoming earnings season, with rubber goods maker Skellerup Holdings kicking it off on Thursday. The company dipped 0.4% to $5.60, giving back some of the prior day’s 8.1% gain.
“The lift in business and consumer confidence will show up in the outlook statements from companies reporting this season,” said Jeremy Sullivan, an investment adviser at Hamilton Hindin Greene. “The boardrooms will be looking towards 2026 with a degree of optimism and we expect reporting to say that.”
Still, unexpectedly sticky inflation has brought forward expectations for the Reserve Bank to start hiking the official cash rate later this year rather than in 2027, and forecasts in next week’s policy review will be closely watched.
The kiwi dollar held on to most of its overnight gains, trading at 60.40 US cents at 5pm in Auckland from 60.14 cents yesterday.
Vulcan Steel led the benchmark index higher after the steel products maker was upgraded to a ‘buy’ rating by UBS analysts, who lifted their target price 9.3% to A$7.65 a share. The stock rose 6% to $8.15 on the NZX, and was up 1.8% at A$6.945 on the ASX. Fletcher Building gained 2.2% to $3.73.
Fonterra Shareholders’ Fund units inched up 0.1 of a cent to $7.941 after ANZ economists raised their forecast 60 cents to $9.50 per kilogram of milk solids. Synlait Milk fell 1% to 52 cents and a2 Milk Co increased 0.3% to $9.88.
Freightways eased from a record high yesterday, falling 0.3% to $14.95 after ANZ’s latest Truckometer survey showed an easing in the light traffic index in January, which tracks vehicle movements such as couriers and tradespeople and typically tracks discretionary spending.
The gauge’s heavy traffic index also eased in January. Trucking firm Move Logistics fell 3.5% to 28 cents, and Mainfreight rose 1.6% to $65 while Port of Tauranga gained 1.7% to $8.
Briscoe Group posted the biggest decline on the NZX50, falling 3.9% to $4.74 after Westpac NZ said spending on its debit and credit cards rose 6% in January from a year earlier, with particularly large increases in hospitality, along with gains in furnishings and other household durable items.
Hamilton Hindin Greene’s Sullivan said about 80% of mortgages have been rolled over, which should help improve household balance sheets, even if the subdued housing market keeps the wealth effect soggy.
Hallenstein Glasson Holdings fell 1.3% to $10 and KMD Brands dropped 1.9% to 25.5 cents.
Spark New Zealand was the most heavily traded stock on the day with a volume of 2.7 million shares, ending the day unchanged at $2.19.
Outside the benchmark index, Bremworth fell as much as 12%, ending the day down 4% at 72 cents after the carpetmaker said tougher trading conditions than expected have eaten into its cash reserves, and it trimmed its forecast capital return, which is separate to the potential sale of the business to Mohawk Industries’ Floorscape business.
Reporting by Paul McBeth.
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