The New Zealand share market experienced a sharp decline Monday, opening down 1% and falling to a 1.3% loss mid-morning, following strikes conducted by the United States and Israel in Iran over the weekend. The benchmark NZX50 closed down 66.32 points, or 0.5%, at 13,656.65, according to the NBR.
Market heavyweights Auckland Airport, Fisher & Paykel Healthcare, and Infratil led the downward trend. Transport and tourism companies were particularly affected, with Tourism Holdings, Napier Port Holdings, and Serko also posting significant losses. Despite rising gold prices, miners Santana Minerals and Rua Gold did not observe corresponding gains, the NBR reported.
The New Zealand dollar weakened alongside the Australian dollar as investors shifted towards safer assets. The Kiwi dollar fell 0.8% to 59.5 US cents, while the Australian dollar experienced a decline exceeding 1% against the US dollar, RNZ reported. This movement reflects a broader pattern of investors reducing exposure to riskier assets during periods of geopolitical instability.
Brent crude oil futures jumped 5.8% to US$77 per barrel, according to the NBR, as concerns mounted over potential disruptions to oil supply. The Strait of Hormuz, a critical waterway for global oil and gas shipments, borders Iran, and shipments have been suspended following the attacks. Analysts have warned that prices could climb as high as US$100 per barrel, RNZ reported.
BNZ senior interest rate strategist Stuart Ritson noted that financial markets began the week “facing heightened uncertainty.” He stated that the scale of the attacks and Iran’s response had exceeded expectations, driving demand for safe-haven assets and increasing pressure on oil prices. Ritson also pointed to President Trump’s call for regime change and the potential for a protracted conflict as factors weighing on risk-sensitive assets.
Westpac chief economist Kelly Eckhold indicated that the upward pressure on international prices would likely translate to higher petrol prices domestically. Brent Crude had already risen more than 2% to US$72.50 per barrel before the attacks, according to RNZ.
Michael Hill International was an exception to the downturn, reporting a 29% increase in like-for-like first-half earnings. Bremworth also saw gains as interests associated with WoolWorks’ owner David Ferrier acquired a 10% stake in the carpetmaker. Meanwhile, members of A2 Milk Co’s executive team sold shares, largely to cover tax obligations.
