NZX50 wavers as Iran deal remains elusive

New Zealand’s S&P/NZX 50 index was one of the laggards across Asia as the local market declined amid the protracted conflict in the Middle East and elevated oil prices, with the likes of Mainfreight and Auckland International Airport weighing on the bourse.

Spark New Zealand continued to plumb new lows as investors question the sustainability of the telecommunications carriers already reduced dividend.

Meanwhile, materials firms Fletcher Building and Metro Performance Glass and property developer CDL Investments rallied after Statistics New Zealand figures showed an unexpectedly big increase in new building consents in April.

And the kiwi dollar remained soft against its trans-Tasman counterpart after Bureau of Statistics figures showed Australia’s economy grew at a slower pace than expected in the first three months of the year, with investment in data centres propping up the so-called ‘lucky country’.

Winter blues

The NZX50 fell 55.63 points, or 0.4%, to 13,115.08, with 26 stocks declining, 19 gaining and five unchanged. The S&P/NZX 20 index futures contract for June slipped 0.2% to 7,455 with 20 lots traded for a value of $149,000. The NZX20 dropped 0.5% to 7,435.46.

Turnover across the main board was $109.7 million, with Contact Energy accounting for almost $14 million of that as the electricity generator-retailer dipped 0.1% to $9.59.

The power companies were broadly weaker after Rio Tinto’s holding company for the Tiwai Point smelter reported a profit of $176 million in calendar 2025 on revenue of $1.49 billion, with the accounts filed with the Companies Office indicating a smaller electricity bill than the prior year. Meridian Energy fell 1.7% to $5.79 and Mercury NZ declined 0.7% to $7, while Genesis Energy advanced 1.2% to $2.60.

New Zealand’s bourse was among the weaker exchanges across Asia as investors weighed up the protracted conflict between the US and Iran and rising oil prices against the ongoing optimism about artificial intelligence.

Australia’s S&P/ASX 200 index was up 0.9% in late trading and Japan’s Nikkei 225 index gained 2.9%, while Hong Kong’s Hang Seng dropped 1.7%.

“It’s the same old theme where we’re still waiting for this challenging tension to ease somewhat with a deal between Iran and the US,” said Peter McIntyre, an investment adviser at Craigs Investment Partners. “June was seen as a key date for a deal to be done before things really start to hurt the global economy.”

Brent crude oil futures rose 1.2% to US$97.19 a barrel at 5pm in Auckland, while the kiwi dollar fell to 59.13 US cents from 59.33 cents as investors’ appetite for riskier assets remained on edge.

Mainfreight and Auckland airport were among the major drags on the local board, falling 3.5% to $62.74 and 0.9% to $8.21 respectively. Air New Zealand slid 2.3% to 42 cents.

Failing to spark

Spark fell to a new 15-year low, dipping 0.3% to $1.875, with Craigs’ McIntyre saying investors were starting to question whether the telco would have to reduce its dividend even further. The telecommunications carrier was the most heavily traded stock on the day with 2 million shares changing hands.

Meanwhile, Ebos Group extended its decline, falling 2.5% to $19.20 and taking its slide so far this year to 30%.

Heartland Group Holdings gave up some of Tuesday’s gain on the TSB deal, falling 0.4% to $1.265. Green Cross Health extended its rally after agreeing to sell its medical unit, up 1.5% at $2.07.

Vista Group International led the NZX50 lower, sinking 7.4% to $2.26, while KMD Brands declined 6.1% to 75.7 cents.

Vital Healthcare Property Trust posted the biggest gain on the day, up 2.7% at $1.89 while Hallenstein Glasson Holdings gained 2% to $9.99 and Goodman New Zealand advanced 2% to $2.06.

Fletcher gained 1% to $3.15 after Stats NZ figures showed residential building permits jumped 11% in April, with a large number of new Auckland apartments driving the series.

Satish Ranchhod, a senior economist at Westpac NZ, said the sharp rise in consents over the past year implied increased building activity in the coming months, but it was unclear whether that momentum would be maintained.

“Conditions in the housing and construction sector have become more challenging in recent months,” Ranchhod said in a note. “The conflict in the Middle East has resulted in a sharp rise in fuel costs, along with related increases in materials costs in the construction sector.”

Among other construction-related companies, Metroglass rose 3.5% to $1.20 and CDL Investments gained 2.9% to 72 cents, while Vulcan Steel fell 4.4% to $6.12. Steel & Tube Holdings was unchanged at 37 cents, and Winton Land was unchanged at $1.60.

Pacific Edge was unchanged at 28 cents after accepting $4.7 million in oversubscriptions in the discounted retail offering, raising $36.1 million in total.

The kiwi dollar fell to 82.49 Australian cents from 82.85 cents yesterday after figures showed Australia’s economy grew a smaller-than-expected 0.3% in the March quarter, propped up by business investment in data centres.

Bevan Graham, an economist at Salt Funds Management, said the data would probably not be a gamechanger for the Reserve Bank of Australia, showing a less resilient economy than some had hoped.

“But it is another reminder that even for the ‘lucky country’, the path to lower inflation may prove more costly for growth than many might have expected,” Graham said.

Reporting by Paul McBeth.