The S&P/NZX 50 fell 3.5 points or 0.027%.
Contact Energy will join a leading MSCI global index at the expense of Mercury as the New Zealand sharemarket drifted to a small loss.
The S&P/NZX 50 traded in a range of 12,882.21 to 12,935.74 before closing at 12,913.95, down 3.5 points or 0.027%.
A total of 38.62 million shares worth $156.83 million changed hands and all eyes were on Mercury, gaining 21c or 3.29% to $6.60 on trade worth $16.39m and Contact, down 5c to $9.25 on trade worth $31.87m.
Contact will be added to the MSCI Global Standard Index on February 28.
Matt Goodson, managing director of Salt Funds Management, said there has already been pre-trading in Mercury and Contact but no one knows whether the stocks are fully priced in.
“Some people have been shorting Mercury expecting to buy back more cheaply when the stock falls, and vice versa for Contact. The passive investment funds are getting bigger all the time and it’s possible the stocks haven’t been fully pre-traded [before the index change].
“Both Mercury and Contact will be a little bit volatile between now and the end of the month, but the fundamentals of the companies will ultimately win,” said Goodson.
In the United States, Federal Reserve chairman Jerome Powell told the Senate Banking Committee the central bank was in no rush to cut interest rates, with the economy strong, downside risks to unemployment low, and inflation having fallen but still above the bank’s 2% long-term goal.
Powell said very little about the Trump tariffs but others had comments. Coca-Cola said it would look at shifting more to plastic bottles as a result of duties on aluminium, and Ford said the tariffs would add a lot of costs and a lot of chaos to the US auto industry.
The company said it would be an advantage to the likes of Toyota and Hyundai, which import hundreds of thousands of vehicles annually that have so far incurred minimal to no duties.
The European Commission said tariffs would trigger firm and proportionate counter-measures.
At home, Genesis Energy, up 4.5c to $2.315, has linked up with Mercury, Meridian and Contact to explore the options of the Huntly power station Rankine units continuing to play a key role managing the dry-year risk and enhancing national security of the electricity supply over a longer timeframe.
One of the units was scheduled to be retired next year and the other two in the early 2030s as the country adds more wind and solar generation.
The partnership follows last winter’s tight market conditions when the energy supply was stretched, hydro lake levels were low, natural gas was declining faster than expected and wholesale electricity prices soared.
Genesis said the arrangement, including pricing and cost, may include a strategic fuel reserve to cover disruptions to other supplies and be similar to the Huntly firming options Genesis brought to market last year.
This could potentially be extended for a term of up to a decade, and the new arrangement is expected to be in place next year.
Goodson said the collaboration of the major players makes a lot of sense for the energy sector, though the arrangement would no doubt be looked at by the Commerce Commission.
“Genesis doesn’t want to carry the can for extending the life of Huntly in a dry year when everyone else benefits. Huntly does have the ability to fire the turbines with wood pellets and this can turn out to be more economic than gas and also replace coal,” he said.
Manawa Energy increased 18c or 3.4% to $5.48; Napier Port gained 7c or 2.64% to $2.72; Port of Tauranga added 9c to $6.60; Scales Corp improved 10c or 2.41% to $4.25; Vulcan Steel collected 14c or 1.77% to $8.04; and Heartland Group was up 3c or 2.78% to $1.11.
Synlait Milk continued to recover on a strong outlook for the dairy sector, gaining 3c or 4.69% to 67c after sitting at 40.5c on January 22.
Other gainers were Ventia Services up 10c or 2.41% to $4.25; Third Age Health rising 15c or 5% to $3.15; Scott Technology collecting 5c or 2.35% to $2.18; Allied Farmers increasing 3c or 3.95% to 79c; BurgerFuel adding 1.5c or 4.23% to 37c; and PGG Wrightson up 4c or 2.12% to $1.93.
Auckland International Airport was down 13c to $8.62; Spark declined 4.5c to $2.85; Freightways eased 14c to $10.75; Channel Infrastructure decreased 4c or 2.03% to $1.93; and ikeGPS fell 4c or 4.88% to 78c.
Ryman Healthcare eased 7c to $4.30; Green Cross Health decreased 2c or 2.5% to 78c; Solution Dynamics was down 2c or 2.9% to 67c; and 2 Cheap Cars shed 3c or 3.85% to 75c.
Software firm Blackpearl Group continued to fall, down 3c or 4.29% to 67c after hitting $1.09 on January 29.