NZX 50 Trades in the Red to Start the Week

The NZX 50 was almost flat, trading around 13,693 at Monday's close, after gaining in the previous session, as gains in consumer staples, communication services, and real estate offset declines in healthcare, financials, and tech sectors. Traders were cautious ahead of the release of Q2 inflation data due on Tuesday amid elevated oil prices. Caution was also built amid persistently high oil prices following US strikes on Iran, as inflation concerns fueled expectations of further interest rate hikes. RBNZ Chief Economist Paul Conway recently warned that sticky inflation could prompt further interest rate hikes. On the data front, New Zealand's trade surplus narrowed to NZD 0.02 billion in June from NZD 0.2 billion in the same month a year earlier, with exports rising less than imports. A2 Milk advanced 2.4%, Auckland International Airport climbed 1.3%, and AFT Pharmaceuticals rose 0.5%, while Ebos Group, ANZ Group, and Fisher & Paykel fell by 0.8%, 0.7%, and 0.6%, respectively.

The NZX 50 dropped 69 points, or 0.5%, to 13,626 in Monday morning trade, halting the gains from the previous session, tracking a decline in US futures after Wall Street closed in the red on Friday, weighed down by a selloff in chipmakers and the escalating Middle East conflict. However, persistently high oil prices following US strikes on Iran also pressured sentiment as inflation concerns fueled expectations of further interest rate hikes. Traders remained cautious ahead of the release of Q2 inflation data due on Tuesday amid elevated oil prices. On the data front, New Zealand's trade surplus narrowed to NZD 0.02 billion in June from NZD 0.2 billion in the same month a year earlier, with exports rising less than imports. Healthcare, utilities, real estate, and financials mainly weighed on the index, with notable losses from Fisher & Paykel Healthcare (-1.8%), F&C Investment (-1.8%), South Port NZ (-1.4%), Channel Infrastructure (-0.9%), and Chorus (-0.9%).

The NZX 50 climbed 80 points, or 0.6%, to close at 13,695 on Friday, reversing its morning weakness, snapping a four-session losing streak, and rebounding from its lowest level since July 2, reached a day earlier, mainly boosted by gains in the energy, materials, and consumer discretionary sectors. Fresh data also lifted sentiment, as food inflation eased to 2.5% in June from 3.2% in May, marking the softest increase in 16 months. However, persistently high oil prices limited the gains, as inflation concerns fueled expectations of further interest rate hikes. Traders remained cautious ahead of the release of Q2 inflation data due next Tuesday amid elevated oil prices. RBNZ Chief Economist Paul Conway recently warned that sticky inflation could prompt further interest rate hikes. Among the top performers were Freightways Group (1.5%), Meridian Energy (1.4%), South Port New Zealand (1.4%), and Chorus (1.2%). For the week, the index fell 0.6%, after rising in the previous week.