The New Zealand sharemarket showed resilience yesterday, managing a slight gain despite weakness on Wall Street and rising oil prices nearing the US$100 per barrel mark. The S&P/NZX 50 Index closed at 13,819.43, up 26.53 points or 0.19%, following a late rally in the brokers’ matching session. Trading was active, with 58 companies advancing and 86 declining on the main board, as turnover reached 33.75 million shares valued at NZ$146.62 million.
Paul Robertshawe, chief investment officer at Octagon Asset Management, noted that local market activity had been subdued in the wake of recent corporate earnings reports, which is typical as investors reassess their positions. The prevailing issues influencing sentiment remained geopolitical tensions in Iran, inflation concerns, rising interest rates, and fluctuating oil prices. Robertshawe also highlighted caution towards stocks with Australian exposure, given ongoing challenges such as rising interest rates, a cooling economy, and instability in the housing market there. He suggested that New Zealand’s economy might be further along the economic cycle, potentially prompting some capital repatriation.
Looking ahead, ANZ anticipates New Zealand’s second quarter GDP figures, due next week, will show 0.1% growth for the quarter and 2.2% for the year, slightly outperforming the Reserve Bank’s forecast of no quarterly growth. The bank revised its earlier prediction from a decline of 0.2%, citing stronger-than-expected construction sector activity, which is projected to rise 3.5%. Despite broad uncertainty fueled by higher fuel prices and global instability, certain sectors such as wholesale trade, professional services, and export-oriented industries displayed enough growth to offset declines in discretionary spending, transport, and tourism.
In the wider market, U.S. equities fell as oil prices pushed inflation worries. The Dow Jones Industrial Average dropped 628 points (1.18%) to 52,786.07, the S&P 500 declined 0.58% to 7,673.52, and the Nasdaq Composite edged down 0.32% to 26,421.41. Brent crude traded at around US$98.97 per barrel late in the day, after reaching an intraday high near US$99.57. Goldman Sachs warned that sustained oil prices above US$100 could subtract 0.4% from global growth.
In New Zealand, key stocks showed mixed performances. Fisher & Paykel Healthcare gained 23 cents to $43.93, while Infratil added 11 cents to $14.70. Energy firms Mercury Energy and Contact rose modestly, and insurer Tower reached a 14-week high of $2, up 3.5 cents, partly driven by expectations of a special dividend related to unused event allowances.
Conversely, some shares ended lower, including Ebos Group, down 23 cents to $20.25, Gentrack falling 31 cents to $4, and Vulcan Steel declining 25 cents to $6.20—suffering from Australian market headwinds. Other fallers included Serko, The Warehouse, NZX, Allied Farmers, and Promisia Healthcare.
Several stocks attracted attention for other reasons. Mainfreight added 58 cents to $66.56, while Millennium & Copthorne Hotels gained 10 cents to $3.20. Pacific Edge advanced 1 cent to 25.5 cents ahead of its upcoming inclusion in the NZX 50 index, replacing KMD Brands, which rose 3 cents to $1.94 amid takeover speculation. My Food Bag also saw gains as it undergoes a structural review, and there was interest in Comvita following notable register movements. Used car dealer 2 Cheap Cars rose 1.5 cents to 82 cents after Sena & Co extended its takeover offer deadline to September 30, continuing its offer at 80 cents per share.
Robertshawe noted an uptick in merger and acquisition activity across the market, signaling heightened investor interest amid current economic uncertainties.