New Zealand’s share market joined a global relief rally as US President Donald Trump backed away from imposing punitive tariffs on most of the world, instead leaving the highest impost solely on China.
The S&P/NZX 50 index jumped 394.88 points, or 3.3%, to 12,201.43, recovering most of its losses so far this week, and joining the rally across Asia as Japan’s Nikkei 225 index climbed 8.7%, Australia’s S&P/ASX 200 index rose 4.5% and Hong Kong’s Hang Seng advanced 1.8%.
Futures are pointing to a 0.7% decline for Wall Street’s S&P 500, turning negative after China’s 84% tariff against US imports came into effect.
“The market is reacting too optimistically today, unless Trump announces further tariff reductions and credibly refrains from future retaliatory increases,” Morningstar senior US economist Preston Caldwell said in a note. “We’ll make some tweaks to our economic forecast, but we still expect a major rise in inflation, slowing economic growth, and a roughly 40% risk of a recession this year.”
Gains were broad-based, with 44 of the top 50 companies on the green side of the ledger. Vulcan Steel led the benchmark index higher as it rose 8.8% to $7.94, followed by logistics group Mainfreight, which advanced 8.6% to $61.34. Gentrack gained 6.3% to $10.70, Skellerup increased 5.8% to $4.35 and Vista Group International climbed 5.4% to 3.50.
The flying bird
The kiwi dollar extended its rally through the Asia trading day, climbing to 56.94 US cents at 5pm in Auckland from 56.45 cents at 7am and 55.46 cents yesterday.
Courier firm Freightways, often seen as a barometer for the domestic economy, rose 4.8% to $10.58 after ANZ’s truckometer gauge showed light vehicle movements – an indicator of demand – remained flat in March, while heavy vehicle movements – a good steer on production – fell in the month.
Spark New Zealand was the most heavily traded stock with a volume of 4 million, as it gained 1.7% to $2.075, while Auckland International Airport rose 4.3% to $8.08 on a volume of 1.8 million. Precinct Properties NZ increased 0.9% to $1.11 on a volume of 1.3 million and Air New Zealand gained 2.6% to 58.5 cents with 1.2 million shares changing hands.
Carpet maker Bremworth increased 1.6% to 62 cents after chief executive Greg Smith announced his departure, effective on Friday, after a changeover of the board.
Metro Performance Glass increased 1.7%, or 0.1 of a cent, to 6 cents after saying market conditions remained challenging, and are expected to remain so through the next financial year.
Serko posted the biggest decline on the NZX50, falling 2.2% to $3.50, while Goodman Property Trust declined 1.3% to $1.885 and Property for Industry slipped 0.7% to $2.105.
Reporting by Paul McBeth. Image from Curious News.