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Market Summary
The New Zealand sharemarket posted its fourth consecutive positive day yesterday with a late rise, despite a2 Milk crashing nearly 10% because of a product recall. The S&P/NZX 50 index fell to an intraday low of 12,938.53 with the early-morning a2 Milk announcement, but suddenly turned around in the brokers’ matching session to close at 13,097.68, up 58.48 points or 0.45%. There were 75 gainers and 70 decliners on the main board with 43.9 million shares worth $144.7m changing hands.
A2 Milk told the market it has initiated a voluntary recall of three batches of its Platinum USA-label infant milk formula, manufactured by Synlait, due to the presence of cereulide toxin. The stock fell 85c or 9.55% to $8.05, recovering from an intraday low of $7.23 but finishing at its lowest level since July 16 last year.
Jeremy Sullivan, an investment adviser with Hamilton Hindin Greene, said investors were given another scare by the bacteria-related toxin after a2 Milk’s weaker financial forecast last month. “The board said given the size of the recall, it was not material to its financial results – and that’s fair enough. But there may be brand and reputational damage, and it will be interesting to see how other markets react. “Hopefully, a2 Milk has caught the recall early enough, and there are no cases of illness because we know how the Americans love a good lawsuit,” Sullivan said. A2 Milk said the importation rights expired on Dec 31, and the USA-labelled product had been discontinued and removed from sale prior to the recall's initiation. The formula was distributed through a2 Milk’s website, Amazon and Meijer stores. The three batches comprised 63,078 tins, of which some 16,428 were sold to consumers. No confirmed incidents of infant illness or harm have been reported to the company, a2 Milk said. The total US infant formula sales accounted for 0.1% of the company’s revenue in the first half of full-year 2026. Synlait Milk, up 0.005c to 43c, said it manufactured the affected product in compliance with all relevant standards at the time, and it was assisting a2 Milk with the recall.
In the United States, the S&P 500 and Nasdaq Composite both hit new highs over the weekend, gaining 0.29% to 7,230.12 and 0.89% to 25,114.44 points, respectively. The Dow Jones Industrial Average was down 0.31% to 49,499.27 points. Sullivan said, “The US earnings season rumbles on, and the tech mega caps have been doing the heavy lifting.” Apple, gaining 3.24% to US$280.14 (NZ$473.29), was the latest Magnificent Seven stock to beat quarterly earnings forecasts, with revenue of US$111.2 billion and record iPhone demand.
Brent Crude oil was down to US$107.6 a barrel at 6pm NZ time. Seven OPEC producers, led by Saudi Arabia and Russia, agreed to a small increase in official June output quotas, adding around 188,000 barrels a day.
Back at home, ASB is again forecasting an increase in the official cash rate in July. “We continue to view the risks skewing to uncomfortably high inflation and pricing behaviour, which will court a quicker than usual normalisation response (hikes from July). "Still, we are not ignorant of the economic and social costs of hiking earlier, and that the fluidity of geopolitical developments may force us to relitigate our view (again). It’s simply a sign of the times,” ASB said.
The market was led higher by Fisher and Paykel Healthcare, up 62c or 1.71% to $36.80; Freightways rising 55c or 4.3% to $13.35; Infratil adding 12c to $12.87; and Meridian Energy collecting 8c to $5.80. Mainfreight gained 50c to $61.50; Chorus was up 16c to $10.18; Ebos Group was up 13c to $21.42; Sanford rose 22c or 2.95% to0 $7.67; Ryman Healthcare added 5c or 2.3% to $2.22; and Seeka increased 11c or 2.21% to $5.09. In the technology sector, Eroad increased by 3.5c, or 3.66%, to 99c, and TradeWindow was up 1.1c, or 6.15%, to 19c. In the retail sector, Michael Hill declined 2.5c, or 5.15%, to 46c, and The Warehouse was down 1.5c, or 2.29%, to 64c. Summerset was down 16c or 1.95% to $8.04; Tourism Holdings shed 8c or 3.83% to $2.01; and Winton Land declined 5c or 2.70% to $1.80.
Cinema management software firm Vista Group, down 2c to $1.90, confirmed in a presentation to investors that its full-year guidance was on track. Revenue would be $176m-$182m, up 7-11% on the previous year, and operating earnings (ebitda) margin would be 18-20%, up from 17.2%. Vista said the 2026 guidance was based on box office returns of US$9.75 billion, and on April 30, the box office was 14% ahead of the prior comparative period.
Source: Business Desk
Australian Market Report
Ahead of the local open SPI futures were 34 points higher at 8723.
- close [Morningstar with AAP]: Australia's share market has started the week lower, pulling back ahead of the Reserve Bank's interest rate decision and as traders weigh developments in the Persian Gulf.
The S&P/ASX200 fell 32.7 points on Monday, down 0.37 per cent, to 8,697.1, as the broader All Ordinaries lost 30.9 points, or 0.35 per cent, to 8,923.8.
Energy stocks, utilities and traditionally defensive consumer staples sold off on news the United States Navy will support ships to exit the Hormuz Strait, a key transit lane for one-fifth of global oil and natural gas supplies effectively blockaded since the US-Iran conflict began on February 28.
"It will be very interesting, because we just don't know whether this is the start of another initiative or threat which gets walked back or, if it does go ahead, will Iran allow safe passage?" IG market analyst Tony Sycamore told AAP.
"If the Strait of Hormuz was open tomorrow, it just solves so many problems for our economy, but whether that happens or not is unlikely, and it seems it could drag on."
The worst-performing sector was consumer staples, with a2 Milk shares plummeting by nearly one-tenth after a voluntary recall of one of its powder formulas in the US.
Dan Murphy's owner Endeavour also dragged, losing 3.8 per cent to $3.29 after a disappointing trading update.
Energy stocks fell more than two per cent, led by drops in Woodside and Santos after oil prices dipped over the weekend.
Coal producers also sold off, while uranium stocks clawed back some of the previous week's losses.
Basic materials shaved 0.3 per cent, after BHP handed back its early gains and Rio Tinto slipped 0.7 per cent to $170.86, despite iron ore prices surpassing three-month highs.
Gold stocks were mixed but ultimately underwhelming, the gold sub-sector fading less than 0.1 per cent as the precious metal weakened to $US4,587 ($A6,370) an ounce.
Financials were sluggish as NAB tumbled 1.6 per cent after its first-half interim earnings missed expectations, while ANZ bounced modestly from its post-reporting sell-off the previous week.
CommBank shares eased 0.5 per cent to $172.21, while Westpac crept 0.1 per cent higher ahead of its earnings call on Tuesday.
Macquarie, Amcor and Orica will also hand down partial results later in the week.
In company news, fashion group Accent tumbled almost 13 per cent after downgrading its full-year earnings guidance and flagging a probe by the corporate watchdog.
The Australian dollar is buying 71.97 US cents, up slightly from 71.96 US cents on Friday, as markets brace for a widely-tipped Reserve Bank interest rate hike on Tuesday.
But the RBA's decision was not a foregone conclusion, Mr Sycamore said.
"Everyone's talking about the succession of hikes because of the feed-through (of fuel prices to the economy), and that we haven't seen it yet," he told AAP.
"It's a tricky one. I wouldn't want to be putting my money on the outcome tomorrow."
A 0.25 per cent hike on Tuesday would ultimately unwind 2025's three cuts and leave the cash rate at 4.35 per cent, its highest level since December 2024.
ON THE ASX:
The S&P/ASX200 dipped 32.7 points, or 0.37 per cent, to 8,697.1
The broader All Ordinaries fell 30.9 points, or 0.35 per cent, to 8,923.8
The NZX 50 Lost -78.99 points (-0.61%) to 13018.69
Companies commencing Ex-Dividend Trading Today (ASX 300):
Qualitas Real Estate Income Fund
Overseas Market Report
[Morningstar with Dow Jones]:
U.S. stocks ended lower. The DJIA declined 1.1% to 48,941.90, the S&P 500 dropped 0.4% to 7,200.75 and the Nasdaq declined 0.2% to 25,067.80.
Among S&P 500 companies, the top three gainers were Tyson Foods Inc TSN surging 7.76%, Micron Technology Inc MU jumped 6.45%, and Coinbase Global Inc COIN lifted 6.22%.
The biggest decliners were United Parcel Service Inc UPS which dropped 10.48%, FedEx Corp FDX fell 9.13%, and C.H. Robinson Worldwide Inc CHRW lost 9.08%.
Asia
Chinese shares closed higher. The benchmark Shanghai Composite Index added 0.1% to 4,112.16 and the Shenzhen Composite Index climbed 0.1% to 2,776.23.
Hong Kong shares ended higher. The benchmark Hang Seng Index lifted 1.2% to 26,095.88.
Japanese shares ended higher. The Nikkei Stock Average added 0.4% to 59,513.12.
India shares ended higher. The BSE SENSEX gained 0.5% to 77,269.40.
Europe
Stocks in the U.K. finished lower. The FTSE 100 Index slipped 0.1% to 10,363.93. In Europe, shares closed lower. The Germany's DAX fell 1.2% to 23,991.27, and the France's CAC 40 dropped 1.7% to 7,976.12
