NZX 50 surges after Democrats sweep US midterm elections – Market close

Matt Goodson, managing director of Salt Funds Management, said the markets’ rise will depend on developments in the Iran war and whether the drop in the oil price will be sustained.

“The markets surged on hope that the Iran debacle may be over, and that’s why US bonds have fallen,” he said.

“When you have the Democrats holding the balance of power, you would not expect fiscal deficits to decline. But the US debt ceiling is set to be renewed next year, and that may bring a lot of brinkmanship.”

On Wall Street, the Dow Jones Industrial Average had its best trading day in 18 months, rising 1,569 points or 3.03% to 53,356.12. It was back over 53,000 points for the first time since September 8.

The S&P 500 gained 1.58% to 7,688.62 points, and the Nasdaq Composite was up 1.44% to 25,736.51 as the Democrats took control of both chambers and Congress.

US Vice-President JD Vance blamed the Republican losses on the Iran war and increased hopes for a peace deal as the oil price fell nearly 10%.

President Trump said he looked forward to working with the Democrats. One commentator said a divided Government suggests little change in major economic policy areas such as AI regulation, since Democrats will struggle to pass legislation over a Trump veto.

Brent Crude oil was trading at US$93.88 (NZ$166.23) a barrel at 6pm NZ time, having reached a high of US$116.73 on October 23. Its recent low was US$72.12 a barrel on July 3.

The US 10 Year Treasury Note yield has fallen to 4.848%, and the NZ 10 Year Government Bond yield is down to 4.656%. The local three-year swap, a key funding rate, has declined from 4.24% to 3.79%.

Across the Tasman, the S&P/ASX 200 Index had risen 2.52% to 9056.9 points, and the Hong Kong Hang Seng was up 3.09%.

But the South Korean Kospi Index fell 4.86% after a temporary trading suspension, and the Japanese Nikkei 225 was down 1.35% on concerns that the Democrats may still impose regulations on AI data centres.

At home, blue-chip stocks benefited from the Wall Street surge.

Fisher & Paykel Healthcare increased $1.81 or 3.87% to $48.56 on trade worth $30.05m.

Auckland International Airport was up 22c, or 2.58%, to $8.74; Meridian Energy gained 10c, or 1.81%, to $5.63; Skellerup increased 22c, or 2.91%, to $7.77; and a2 Milk added 29c, or 3.35%, to $8.95.

Infratil rose 51c, or 4%, to $13.25 after Australian data centre operator NextDC rose 47% to A$9.65. Goodman Group and Digital Realty Trust made an after-market share raid, building a 9.9% shareholding at $9.50 a share.

Fletcher Building was up 11c, or 3.1%, to $3.66; Fonterra Shareholders’ Fund increased 45c, or 5.01%, to $9.44; Briscoe added 10c, or 2.35%, to $4.36; Gentrack rose 23c, or 5.58%, to $4.35; and Spark gained 4c, or 1.96%, to $2.08.

The retirement village operators were stronger. Summerset increased 20c, or 3.23%, to $6.40; Ryman Healthcare was up 4c, or 2.2%, to $1.86; and Oceania Healthcare gained 2c, or 3.1%, to 66.5c.

AFT Pharmaceuticals was up 13c, or 2.89%, to $4.63; Vulcan Steel increased 28c, or 4.09%, to $7.13; Stride Property added 5c, or 4.63%, to $1.13; Investore gained 2c, or 2.02%, to $1.01; and Seeka collected 11c, or 2.2%, to $5.11.

Contact Energy was up 14c to $8.59 after completing a $350m green bonds offer that included $125m in over-subscriptions and carries an interest rate of 5.8% a year, with the first reset date of May 19, 2032.

Solar developer Lodestone Energy fell 25c or 11.21% to $1.98, below its listing price of $2.25.

WasteCo, up 0.001c or 14.29% to 0.008c, said Singapore-based Navaa Holdings has invested $3m by purchasing 287.71 million new shares at 7c a share and making a $986,000 loan. Navaa has taken a 19.99% shareholding.

Santana Minerals gained 3.5c, or 6.60%, to 56.5c after telling the market that infill drilling at the Rise and Shine deposit in the Central Otago Bendigo-Ophir Gold Project has delivered outstanding results.