NZX 50 Extends Fall to Start the Week

The NZX 50 dropped 73 points, or 0.5%, to 13,666 in Monday morning trade, extending losses from the previous session, mainly weighed down by utilities, industrials, healthcare, and financials. Traders continued to assess last week's economic data. New Zealand’s GDP grew 0.1% quarter-on-quarter in Q2, down from 0.2% previously, marking the weakest growth in a year, while accelerating to 2.6% year-on-year, marking the fastest increase in three years. Traders also continued to monitor oil prices amid rising tensions in the Middle East. Caution was also building ahead of the Trump-Xi summit after China held interest rates for a 16th month, as expected. However, gains in US stock futures capped the fall after the Dow Jones recorded a third straight losing week. Among the early losers were Mainfreight (-2.0%), Fisher & Paykel (-1.2%), Auckland International Airport (-1.4%), Meridian Energy (-1.1%), Mercury NZ (-1.0%), and Fletcher Building (-0.8%).

The NZX 50 lost 17 points, or 0.1%, to close at 13,739 on Friday, reversing its morning gains and halting a two-session winning streak, as traders continued to assess the GDP data. Thursday’s data showed New Zealand’s GDP eased to 0.1% quarterly from 0.2%. Traders anticipated China’s interest rate decision and US PMI data next week for clues about the economic outlook in the two countries. However, the latest data capped declines, as New Zealand’s trade deficit narrowed in August from July, while food inflation remained at a 19-month low. A rally on Wall Street Thursday also helped prevent the index from falling deeper, as easing oil prices softened Treasury yields. Consumer staples, financials, and communication services mainly weighed on the index, with the biggest laggards including A2 Milk (-3.9%), Skellerup Holdings (-2.9%), Gentrack Group (-2.6%), Infratil (-1.0%), and Westpac Banking Corp (-0.9%). For the week, the index rose 1.2%, after falling in the previous week.

The NZX 50 advanced 29 points, or 0.2%, to 13,785 in Friday morning trade, up for the third straight session, tracking gains on Wall Street overnight as easing oil prices softened Treasury yields, while the Fed’s rate hike reaffirmed the central bank’s commitment to contain inflation. Thursday’s data continued to lift sentiment after New Zealand’s GDP grew faster than expected in Q2. However, traders awaited China’s interest rate decision and US PMI data next week for clues about the economic outlook in the two countries. On the data front, New Zealand’s trade deficit narrowed in August from July, as exports rose more than imports, while food inflation stayed at a 19-month low. Real estate, consumer discretionary, and financials mainly drove the index, with notable gains including Port of Tauranga (1.0%), Chorus (0.8%), Hallenstein Glasson (0.8%), and Auckland International Airport (0.5%). For the week, the index is heading for a 1.5% gain, after falling in the previous week.