NZ sharemarket down 0.3% amid AI upheaval

The New Zealand sharemarket, dictated by the volatile Fisher and Paykel Healthcare stock, posted another small decline and avoided the upheaval in the technology sector on Wall Street.

Tuesday, January 28th 2025, 6:35PM

by BusinessDesk

The S&P/NZX 50 Index traded steadily after the sharp fall in the opening and closed at 12,957.15, down 42.57 points or 0.33%. The index reached an intraday low of 12,875.96 points.

Volumes were back to normal, with 34.8 million share transactions worth $124.01m.

'How real is DeepSeek?'

The technology sector in the United States sold off with the appearance of the new Chinese company DeepSeek’s artificial intelligence (AI) assistant as the most downloaded free application in Apple’s App Store, overtaking OpenAI’s ChatGPT.

DeepSeek said its open-source, large language model uses cheaper chips and less data and took only two months to build at a cost of under US$6m (NZ$10.6m). This was enough to spook investors.

The Nasdaq Composite plunged 3.07% to 19,341.83 points, and the S&P 500 was down 1.46% to 6012.28. However, the Dow Jones Industrial Average gained 0.65% to 44,713.58 points.

Chipmaker Nvidia slumped to its biggest one-day loss after falling 16.86% to US$118.58 and trimming NZ$1.046 billion off its market capitalisation. Advanced Micro Devices was down 6.37% to US$115.01.

Matt Goodson, managing director of Salt Funds Management, said there was clearly a huge sell-off in technology names that had previously been untouchable.

“It’s very hard to know what to make of the new apparently lower artificial intelligence model. Investors are starting to question whether the massive investments in AI are truly justified or is there a better way of working.

“How real is DeepSeek? What was it trained on, and did it really cost US$6m? Only time will tell, but it shows the positioning of the likes of Nvidia was vulnerable to news like this,” Goodson said.

Local stocks

At home, Fisher and Paykel Healthcare’s gyrations continued with a decline of 95c or 2.43% to $38.18 on trade worth $15.88m, and Infratil was down 42c or 3.61% to $11.20.

Goodson said Infratil had some exposure to AI developments through its investment in CDC Data Centres.

“CDC has long-term contracts with highly credible counterparties, and could there be less demand for more data centres than investors are currently thinking?”

Ebos Group climbed $1.50 or 4.11% to $38. Across the Tasman, Chemist Warehouse – which is being merged with Sigma Healthcare – reported a strong six-month trading update, with total sales increasing 13% to A$5.154b.

In the energy sector, Meridian declined 16c or 2.69% to $5.78; Contact was down 6c to $9.43; Mercury decreased 3c to $6.02; and Genesis shed 4.5c or 2.01% to $2.195.

Sky TV was down 5c to $2.94; Santana Minerals fell 10.5c or 16.94% to 51.5c; Rakon declined 5c or 8.2% to 56c; Green Cross Health shed 6c or 7.23% to 77c; Scott Technology decreased 6c or 2.68% to $2.18; and Being AI eased 1.5c or 5% to 28.5c.

Gentrack increased 40c or 3.3% to $12.40; a2 Milk gained 9c to $6.49; Auckland International Airport added 10c to $8.69; South Port NZ collected 14c or 2.43% to $5.90; and Sanford improved 7c to $4.75.

Mainfreight collected $1.04 to $71.30; Freightways added 14c to $10.70; Scales Corp increased 15c or 3.74% to $4.16; Eroad increased 3c or 2.86% to $1.08; and Steel & Tube was up 3c or 3.66% to 85c.

In the retail sector, Briscoe Group gained 14c or 3.01% to $4.79; Hallenstein Glasson collected 20c or 2.47% to $8.30; and Michael Hill was down 1c or 1.72% to 57c.

In the property sector, Argosy gained 2.5c or 2.46% to $1.04; Vital Healthcare Trust was up 4c or 2.21% to $1.85; and Investore was down 2c or 1.79% to $1.10.

Among leading banking groups, ANZ was up 65c or 1.96% to $33.75, and Westpac added 92c or 2.56% to $36.88.

Pacific Edge increased 0.004c or 6.9% to 6.2c, and Metro Performance Glass was up 0.006c or 10.34% to 6.4c.

Pole monitoring firm ikeGPS increased 4c or 7.02% to 61c after reporting a 21% increase in revenue to $18.5m for the nine months ending December, with subscription revenue up 29% to $10.2m and transaction income up 14% to $5.8m. The company closed a record $44m in total contracts involving 640 deals.

Medicinal cannabis company Rua Bioscience, down 0.001c or 3.33% to 2.9c, reported revenue of $693,829, ahead of the forecast $600,000, for the six months ending December, with increased demand in NZ and Germany.

Fellow medical cannabis stock Greenfern Industries declined 0.003 or 11.54% to 2.3%.

General Capital, a licensed non-bank deposit taker, was unchanged at 26c after reporting that assets increased 9% to $196.3m during the December quarter and net pro

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