New Zealand equities fell sharply on Monday morning, with the benchmark index dropping 177 points, or 1.3%, to 13,546 and ending a two-session winning streak, as escalating geopolitical tensions hit risk appetite. Sentiment deteriorated after weekend reports of U.S. and Israeli strikes on Iran, the reported death of Supreme Leader Khamenei, Iranian retaliation against Gulf states, and the closure of the Strait of Hormuz.
Traders also adopted a more cautious stance ahead of this week’s PMI data from China, New Zealand’s largest trading partner, amid concern that the Lunar New Year holidays may have curtailed both manufacturing and services activity. On the domestic front, markets were awaiting January building consent figures following a steep, six-month low in permits recorded in December.
Even so, the broader sell-off was tempered by continued optimism that New Zealand’s monetary policy will remain supportive, in line with recent guidance from the central bank. Sector performance was broadly negative, led lower by healthcare, energy minerals, and transport stocks. Among notable movers, Ryman Healthcare shed 2.8%, Genesis Energy slipped 2.6%, A2 Milk Co. declined 2.4%, and Fletcher Building lost 2.0%.