NZ sharemarket up 0.4%, Sanford dominates trading – Market close

The New Zealand sharemarket, flat for most of the day, was again helped by a late rise, while offshore investors began questioning the startling run in semiconductor stocks.

The S&P/NZX 50 sprang into life during the brokers’ matching session and closed at 13,161.97, a gain of 60.36 points or 0.46%. The index declined more than 0.6% for the shortened week.

There were 60 gainers and 70 decliners on the main board, and turnover reached 42.1 million shares worth $197.1 million.

A third of the trading involved seafood exporter Sanford with $64.2m worth of shares changing hands following a block sale.

Sanford declined 21c or 3.83% to $7.21 after Ngāi Tahu Investments sold 8.97 million or 9.6% of its shares at $7.15 a share. The South Island iwi will continue to hold a 10.3% shareholding in Sanford.

Easily triggered large-scale profit-taking

Mark Lister, investment director at Craigs Investment Partners, said it was always going to be a quiet week following all the excitement of the Reserve Bank meeting, the Budget and market heavyweights reporting their latest financial results.

In the US, the first crack in the recent surge of semiconductor stocks appeared when Broadcom fell 12.59% to US$418.91 ($714.17) after providing what analysts described as a conservative earnings outlook.

Broadcom, whose share price had risen 40% year-to-date, lost US$280 billion in market value when it forecast US$16b in AI chip revenue in the third quarter, below the estimates of US$17.2b, and kept its guidance of US$100b unchanged for the 2027 financial year.

Fellow chipmaker Micron Technology was down 7.74% to US$996. The Philadelphia Semiconductor Index dropped more than 6%.

Commentators said that any management statements that were merely in line, rather than beating expectations, easily triggered large-scale profit-taking. Was it a sign of lingering softness in parts of the AI chip market?

The scepticism spread offshore with Taiwan Semiconductor Manufacturing Co down 0.84%, and in South Korea, Samsung had declined 4.69%, and SK Hynix had fallen 7.88% at 5.45pm NZ time.

Those stocks have heavy weightings in their home indices, and the South Korean Kospi was down 4.39%, and the Taiwanese Taiex was down 1.33%.

Lister said that when a high-flying sector like semiconductors is in vogue, the bar is set very high, and the market expects even stronger results. It can just as easily move into reverse very fast.

The semiconductor softness didn’t worry the Dow Jones Industrial Average, which charged to a new high after gaining 874 points, or 1.73%, to 51,561.93, with 21 of its 30 stocks rising.

The tech-driven Nasdaq Composite was steady at 26,830.96, and the S&P 500 was up 0.41% to 7584.31.

Local stocks

There was little in the way of big movements on the local market – except Ebos Group rebounding 61c or 3.13% to $20.11.

Market leader Fisher & Paykel Healthcare was up 34c to $37.18; Mainfreight collected 70c to $63.21; Spark recovered 3c to $1.87; and Goodman NZ added 5c or 2.49% to $2.06.

NZME increased 3c or 2.68% to $1.15; Pacific Edge was up 2c or 7.14% to 30c; and Scott Technology gained 5c or 2% to $2.55.

Vulcan Steel was down 14c or 2.3% to $5.95 – it was as high as $9.14 in early October 2024 – Vista Group decreased 5c or 2.2% to $2.22, and Ryman Healthcare shed 4c or 1.75% to $2.25.

Takeover target Tourism Holdings declined 8c, or 3.14%, to $2.47, well below the $3.10 per share bid.

Serko was down 4c or 2.56% to $1.52; Synlait Milk shed 2c or 4.6% to 41.5c; Radius Residential Care fell 1.5c or 3.75% to 38.5c; and South Port NZ decreased 20c or 2.23% to $8.75.

Infratil was up 22c to $15.42 after completing a $200m bookbuild of capital bonds, including $50m in oversubscriptions, maturing on June 15, 2057, with an initial interest rate of 5.5% per annum.

Meridian Energy, unchanged at $5.91, has received the fast-track panel’s backing, in a draft decision, for easing access restrictions on Lake Pūkaki hydro storage in the Mackenzie Basin for a three-year period.

Meridian sought approval to access water stored between 518 and 513 metres above sea level, before the point where Transpower estimates a 4% risk of an electricity shortage.

If the draft decision is confirmed, Meridian proposes to treat half of the five metres of contingent storage as only accessible when there is a heightened risk to security of supply during the remainder of the year.