NZ shares join global selloff; kiwi dollar rallies against US - Market close

Components maker Rakon – which talked up its growth opportunities in AI at Wednesday’s annual meeting – fell 6.3% to 75c. Photo / Dean Purcell

New Zealand shares joined a global selloff as investors were disappointed by Nvidia’s strong result in the US, while more weak earnings at home added to the sombre mood.

The S&P/NZX 50 Index dropped 116.99 points, or 0.9%, to 12,353.61. Across the main board, 101 stocks fell, 37 rose, and 41 were unchanged. Turnover was $123.9 million, with 11 companies trading on volumes of more than a million shares.

Stock markets across Asia fell after chipmaker Nvidia’s more than doubling of sales and earnings in the June quarter failed to inspire investors who’ve driven the share price up more than 150% this year alone.

“It doesn’t feel like they disappointed,” said Rickey Ward, head of investment strategy group at JBWere. “There’s always been a question in markets about their ability to continue growing.”

Tech stocks felt the hit more keenly in Asian markets, while in NZ, components maker Rakon – which talked up its growth opportunities in AI at Wednesday’s annual meeting – fell 6.3% to 75c, while Infratil, whose CDC Data Centre business expect to benefit from increased AI adoption, declined 1.7% to $10.82.

The local earnings season continued to weigh on the local market, with more companies highlighting how tough the domestic economy has been.

Heartland Group Holdings led the benchmark index lower, sinking 12% to $1.03 on a volume of 1.3 million shares after missing its guidance due to a late increase in provisioning for bad debts. The financial services firm reported a 22% decline in net profit.

Brad Gordon, an investment adviser at Forsyth Barr, said companies linked to the domestic economy such as Heartland were struggling in the current market.

“The market just doesn’t like a messy result at this stage in the cycle,” he said. “It’s a good business though, and well-positioned when things start to turn.”

Air NZ declined 0.9% to 55.5c after reporting that pre-tax earnings more than halved as it faced greater competition on international routes and contended with higher costs and disruptions from ongoing engine maintenance issues.

Forsyth Barr’s Gordon said the airline was the latest to feel the brunt of reduced international visitors. Australia’s Qantas Airways, which also reported today, said it expected a decline in first-half revenue from its international business.

Tourism Holdings fell 0.5% to $2.06, SkyCity Entertainment Group declined 1.4% to $1.42, Auckland International Airport decreased 1.5% to $7.44 and online travel software developer Serko dropped 4.9% to $3.14.

Comvita dropped 4.2% to $1.13 after reporting a $77m loss, having flagged writedowns and an executive overhaul last week.

A rally in the kiwi to a near eight-month high of 62.90 US cents weighed on exporters such as Fisher & Paykel Healthcare, which declined 2% to $35.20. The local currency was buoyed by a sharp turnaround in business confidence.

Spark NZ recovered from its five-year low, rising 2.2% to $3.68 on a volume of 4.3 million. The telecommunications and IT services group missed its earnings guidance last week.

JBWere’s Ward said Spark was the biggest disappointment of the soft earnings season, given its track record of reliability.

“It’s the type of investment where people allocate their money in times of uncertainty, because it’s a safe haven,” he said. “That hasn’t proven to be the case.”

Vital Healthcare Property Trust posted the day’s biggest gain on the NZX50, up 2.8% at $1.995 on a volume of 1.6 million.

Bremworth posted the biggest gain on the main board, climbing 10.3% to 43c after signalling a resumption of dividends was on the cards by 2026 as it reported a 57% slide in annual profit to $4.7m as the pace of cyclone-related insurance payments slowed.

Delegat Group gained 8.8% to $5.44 after lifting operating earnings 7%, while Foley Wines advanced 1.3% to 78c as its operating earnings sank 20%.

Restaurant Brands NZ advanced 3.6% to $3.19 after reporting a 20% lift in first-half earnings.

NZME was the most heavily traded company with a volume of 8.9 million, as it rose 1% to 97c. Some 8.7 million shares – or 4.7% of NZME’s issued shares – changed hands in two trades at 95c a share.

Arvida Group rose 0.6% to $1.65 on a volume of 5.6 million, with the company’s board supporting the $1.24 billion, or $1.70 per share, offer from private equity first Stonepeak after getting initial court approval for the buyout.