New Zealand stocks joined a rally across Asia as investors shrugged off the whipping around of Wall Street.
The S&P/NZX 50 index rose 115.56 points, or 1%, to 11,891.44, unwinding some of Monday’s sharp selloff in the height of fears about US President Donald Trump’s tariff war with the world.
Markets across Asia were broadly stronger as Japan’s Nikkei 225 index jumped 5.5% in afternoon trading and Australia’s S&P/ASX 200 index rose 2%, while Hong Kong’s Hang Seng increased 1.3% after Mainland China stepped in to support its markets after Monday’s slump.
“Bargain hunters are out there in force,” said Jeremy Sullivan, an investment adviser at Hamilton Hindin Greene.
Wall Street was whipped back and forth overnight as investors pondered the White House’s path, taking false reports of a potential pause in the tariff regime taken at face value, and accepting later comments by Trump that he's open to negotiations on a country-by-country basis.
In saying that, Trump ratcheted up tensions with China, threatening further tariffs if the world’s second-biggest economy retaliated to the latest imposition. China, in turn, has vowed not to bow to the US, with reports that it may devalue the yuan further or dump its holdings of US Treasuries to drive up government bond yield.
New Zealand's finance minister Nicola Willis said the tariff war was weighing on the domestic economic outlook, but she committed to the government’s fiscal strategy and delivering a budget that supports growth.
Alright, guv?
Meanwhile, Reserve Bank deputy governor Christian Hawkesby was appointed acting governor for six months ahead of tomorrow’s policy review, which is expected to deliver a quarter-point reduction to the official cash rate to 3.5%
New Zealand’s 10-year swap rate rose 11 basis points to 4% in local trading, while the kiwi dollar climbed to 56 US cents at 5pm in Auckland from 55.29 cents at 7am and 55.71 cents yesterday.
The Fonterra Shareholders’ Fund led the NZX50 higher, rising 5.3% to $5.58, while milk processor Synlait Milk advanced 4.2% to 75 cents, fruit exporter Scales Corp gained 4% to $4.20, and The a2 Milk Co increased 2.5% to $8.51.
Summerset Group increased 2% to $10.98 after reporting a 14% increase in March quarter sales from a year earlier, driven by strong resales in the period.
Spark New Zealand was the most heavily traded company, rising 2.2% to $2.075 on a volume of 2.7 million shares, while Infratil gained 2.7% to $9.60 with 2.2 million shares traded, Auckland International Airport advanced 0.2% to $7.715 on a volume of 1.7 million and Meridian Energy climbed 2% to $5.73 on a volume of 1.3 million.
NZME declined 0.9% to $1.05 on heavier trading than usual, with reports that activist shareholder Jim Grenon lost the support of long-term investor Roger Colman, who owns about 2.9% of the media company. Some 805,000 shares changed hands today, the bulk in two tranches with 565,000 shares trading at $1.05 each, and another 200,000 shares changing hands at $1.06 apiece.
Warehouse Group posted the biggest decline on the benchmark index, falling 4.7% to 80 cents, and touching a new record low 79 cents during the trading session. Sanford declined 3.5% to $4.70 and Skellerup fell 2.8% to $4.18.
Reporting by Paul McBeth. Image from Curious Media.