2025.08.1806:05:28UTC+00New Zealand Stocks End Near 6-Month High

On Monday, the S&P/NZX 50 index increased by 0.6% to reach 12,971, marking a continuation of its upward trend for the fourth consecutive session. This movement positions the index close to its highest point since February, influenced by the anticipation of further rate cuts from the Reserve Bank of New Zealand (RBNZ). The market is currently predicting a reduction of 25 basis points to 3%, with an additional cut to 2.75% expected early next year. Analysts noted that although monetary policy settings are nearing neutrality, the presence of weak growth and unused capacity may still justify more economic stimulus. Two-year swap rates are hovering near their lowest levels since 2022, indicating potential room for a surprise shift towards a more aggressive stance.

In economic developments, the contraction in the services sector in July pointed to persistent weaknesses in economic activity. In the corporate sphere, A2 Milk saw a 2.6% increase after it projected the Ebitda margin for fiscal year 2026, excluding Mataura Valley Milk, to be between 15% and 16%, surpassing market expectations according to Barrenjoey. Other significant gainers included Eroad, which climbed 3.9%, Vector Limited with a 3.7% rise, Gentrack up by 2.9%, Infratil which gained 2.2%, and Mercury NZ with a 2.1% increase.