NZ stocks end firm on China trade optimism – Market close

Shares in Mainfreight rallied after the company said its 2025 earnings will be above market expectations. Photo / Supplied

Optimism that there may soon be a solution to the US-China trade impasse helped drive the New Zealand sharemarket higher, along with others around the region.

The benchmark S&P/NZX 50 index ended at 12,327.89, up 179.29 points or 1.48%, and built on Thursday’s 2% gain.

There were 78 rises and 52 falls among the 41.1 million shares worth $145.7m traded.

The standout performer on the day was logistics firm Mainfreight, which gained $6.84 or 12.4% to end at $62.01 after a positive earnings update.

According to news reports from Hong Kong, China was assessing proposals by the US to begin trade talks.

Late in the day, Australia’s ASX/S&P200 index was up by about 1% and futures market pricing suggested Wall Street’s S&P 500 would be in for an 80-point gain.

“We’re really careful about how to react to headlines in this environment because they’re all over the place, but reports are suggesting that China may respond to US overtures,” Salt Funds managing director Matt Goodson said.

“So that’s sort of a macro driver.

“Secondly, what we’re seeing in New Zealand is a typical start to the month with higher cash flows, which has become a bit of a pattern in recent times.

“The third and interesting company-specific thing is the Mainfreight update.”

Goodson said Mainfreight had previously been weak on fears about how the company would be affected by higher trade tariffs.

But in an update, the firm said it expected its profit before tax and sales revenues for the March 2025 year to be above market consensus expectations of $375m and $5.1 billion, respectively.

“However, we are seeing a reduction in forward sea freight bookings for May on the Transpacific trade route, China to US,” Mainfreight said.

For the 2024 year, Mainfreight reported pre-tax earnings of $395m and revenue of $4.7b.

The company is due to report its annual results on May 29.

Goodson said Mainfreight’s update was taken as a “strong positive”.

“Looking forward, it’s more mixed.”

Auckland International Airport (AIA) was also strong, gaining 14.5c or 1.9% to $7.73.

“AIA has been very weak on regulatory fears and it has been struggling to get back to pre-Covid levels, so it’s just having a bit of a bounce,” Goodson said.

Despite challenging power generation conditions, Mercury NZ was firm, up 12c at $5.89, while Meridian gained 14c to $5.77.

Shares in Contact Energy were weaker initially but ended the day flat at $9.15 while those of its takeover target, Manawa, were also unchanged at $4.85.

The Commerce Commission is expected to release its decision next Friday as to whether the Contact-Manawa transaction can proceed.

If the transaction is approved it will be one of the biggest energy deals since the partial privatisation of the electricity market a decade ago.

Manawa, formerly Trustpower, operates 26 power schemes from Bay of Plenty in the North Island to Otago in the South.

The deal going ahead would make Contact the second-largest generator in New Zealand behind Meridian Energy (31%).

Jamie Gray is an Auckland-based journalist, covering the financial markets, the primary sector and energy. He joined the Herald in 2011.