NZX rallies 0.87% as tariff uncertainty eases; Skellerup climbs 4% - Market close

Skellerup, which manufactures much of its rubber equipment in China, bounced 4.17% to $4.74. Photo / Supplied

New Zealand equities rallied on Tuesday after trade talks between the United States and China gave investors some sought-after certainty.

The benchmark index, the S&P/NZX 50, was up 0.87%, ending the busy day’s trading on 12,786.74 points. Just over 54 million shares changed hands amounting to $208m in value traded.

The gains followed an overnight surge in US markets as investors digested the news that the world’s two largest economies have reduced tariffs for a minimum of 90 days.

US tariffs were lowered to 30%, while China’s dropped to 10%. These figures are in addition to tariffs that existed before the trade dispute.

The S&P 500 ended 3.3% higher overnight and the tech-heavy Nasdaq Composite closed up 4.3%.

Peter Sigley, director of institutional sales at Forsyth Barr, said markets were responding to getting certainty back.

“When there’s uncertainty, the market will tend to price in whatever is the worst possible case. [The US and China] have come out with something that is not quite definitive, but it is a big step in the right direction.

“They’ve taken unknown unknowns off the table.”

Direct exposure

Senior research analyst at Craigs Investment Partners Mohandeep Singh said easing trade tensions were most visible in the price movements of companies with direct exposure to the US.

“Skellerup and Mainfreight would be the ones that are right at the epicentre of that, I’d say.”

Compounding Monday’s gains, Mainfreight rose 4.24% to $68.80.

On May 2, Mainfreight signalled to the market that it had experienced a reduction in forward freight bookings on the Transpacific trade route between China and the US.

“The magnitude of tariffs reductions means that potentially volumes start to flow again and less risk there’s a slowdown in cargo, which would impact Mainfreight.”

The transport and logistics firm has risen from a 52-week low of $55 in recent weeks and will report its full-year financial results to April on May 29.

Skellerup, which manufactures much of its rubber equipment in China, bounced 4.17% to $4.74.

“Skellerup essentially will now face a tariff of 55% on its products it sources from China, rather than 170%,” Singh said.

Sigley also put both Serko, which lifted 5.99% to $3.36 and IkeGPS, which climbed 7.95% to 95 cents in the basket of stocks helped by the easing of tensions.

Fisher & Paykel Healthcare led the index in volumes, rising 2.84% to $36.20 with nearly $26m in value traded.

Singh stopped short of saying the movement was a direct consequence of the news in Switzerland.

“The China-US tariff relationship probably doesn’t hit Fisher & Paykel Healthcare, but if you take the secondary positive, which is that [US President Donald] Trump’s being more pragmatic and backing down from some pretty loony levels, then maybe that’s good for other parts of the world as well.”

Not Trump

Away from Trump altogether, Vista shares jumped 2.82% to $3.65 after the cinema software company announced it had inked another deal.

Vista said Vista Cloud would be rolled out to 25 of Regal’s Picturehouse sites in the United Kingdom and Ireland during 2025.

Meridian Energy’s share price fell 1.36% to $5.80 after announcing it would pay $70m for Z Energy’s electricity retail business, Flick Electric.

In a statement to the NZX, Meridian said the divestment by Ampol, the Australian-based parent of Z, was about strategic fit as Z evolves its strategy to focus on public, business and home electric vehicle charging.

At 5pm, Ampol shares had risen 1.51% on the Australian Securities Exchange (ASX).