Strength on Wall Street followed stronger-than-expected economic data, including a 0.6% gain in retail sales in June after a 0.9% fall in May, which gave more weight to the view the US Federal Reserve will not change rates any time soon.
Australian stocks were also sharply higher towards the end of the New Zealand business day, driven mostly by resource sector stocks.
“It’s a bit surprising that Australia is up so strongly, but our market was not participating at all after another quiet news day,” Salt Funds managing director Matt Goodson said.
Weighing on the index was Fisher & Paykel Healthcare, which will hold an investor day in Melbourne on Wednesday, the stock finishing 21c or 0.57% down at $36.54.
Fletcher Building, despite releasing a downbeat quarterly report, bucked the trend to end 9c or 3.03% higher at $3.06.
Goodson said Fletcher’s gains showed investors were willing to look through the data and take a long-term view.
“Markets are forward-looking and always trying to look through to a change in the cycle, which will occur at some stage as interest rate cuts kick in,” he said.
Auckland International Airport dropped 12c to $7.66 after firming yesterday.
Research firm Morningstar noted the Ministry of Business, Innovation and Employment had been reviewing the regulation of airport services and had said it was not considering a legislative change for the airport.
“The bottom line: we maintain our $9.30 fair value estimate,” Morningstar said. “Shares are undervalued.
“We think the market is unjustifiably pricing either lower returns on regulated expenditure or weakness in unregulated businesses, like retail and car parks,” Morningstar said.
Among the small-cap stocks, the lower-tier aged-care firms performed strongly.
Leading the charge was Third Age Healthcare, up 40c or 10.7% at $4.15.
Promisia Healthcare gained 5c (9.6%) to 57c after releasing a performance update showing group care occupancy for June 2025 averaged 87%.
In the same camp was Radius Healthcare, up 3.5c (9.6%) at 40c.
It was the last day of trading for NZ Wind Farms, which is being taken over by Meridian.
“It really continues a trend of smaller companies delisting and of there being no real pipeline of new ones coming on, which has to be a concern,” Goodson said.
“If you’re not in the index, it’s very hard for these small companies to get attention.”
Looking ahead, the Consumers Price Index for the second quarter is due on Monday.
ANZ expects the index to have lifted by 0.8% quarter-on-quarter, with annual inflation accelerating to 2.9%.
The bank said the data would need to show a “sizeable upside surprise” for the Reserve Bank to take an expected 25-basis-point rate cut off the table at the release of its Monetary Policy Statement of August 20.
Jamie Gray is an Auckland-based journalist, covering the financial markets, primary sector and energy. He joined the Herald in 2011.
