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A2 Milk pushed the S&P/NZX 50 Index into positive territory in a late trading surge on speculation the milk marketing firm might get access to the US.
Trading of A2's shares was halted on both sides of the Tasman after the stock lifted 8.6 per cent to $5.42 on the NZX.
After NZX trading closed, A2 noted speculation in the Australian Financial Review that it was nearing approval from the US Food and Drug Administration but said its application to sell infant formula in the US was still being reviewed.
A2 Milk, like many other companies, has sought to take advantage of a relaxation in US infant formula import requirements as that country grapples with a baby formula shortage.
The S&P/NZX 50 index gained 6.60 points, or 0.1 per cent, to 11,532.46. Turnover on the main board was relatively quiet at $83.7 million.
New Zealand's market outperformed Asia as tensions between the US and Beijing ratcheted up. Japan's Nikkei fell 1.4 per cent while the Hang Seng Index was down 2.5 per cent.
According to The Guardian, the US national security council (NSC) has insisted that US Speaker Nancy Pelosi "has the right to visit Taiwan", amid reports that she will be landing on the island on Tuesday – a move that China has vowed to respond to forcefully.
"We are seeing weakness in Japan and Hong Kong just as tensions between Beijing and Washington are growing as Nancy Pelosi is set to visit Taiwan," said Peter McIntyre, an investment adviser at Craigs Investment Partners.
"Anything that threatens world security is not going to be great for the market," said Grant Davies, an investment adviser at Hamilton Hindin Greene.
NZ faces the constant challenge of balancing its relationship with both China and the US.
Yesterday, Prime Minister Jacinda Ardern batted off questions about the potential visit, saying it was a US foreign policy matter.
The market was also bolstered by gains in Plexure Group and Pacific Edge. Plexure Group, which is outside the benchmark index, again jumped 26 per cent to 41 cents after yesterday's news McDonald's has renewed its contract with the company to use its digital customer engagement platform for the next five years. That added to yesterday's 53 per cent gain.
"They are generating reasonable revenue and that revenue is expected to grow, as are their profits so that was a really positive announcement," said McIntyre.
Pacific Edge clawed back some of yesterday's losses after it said its cancer tests could be dropped by a major US health insurance company that is considering a new way to choose which tests are covered. The stock climbed 11 per cent to 54 cents.
"The company is probably going to be a bit volatile for a while," said Davies. "There are still a lot of unknowns around their ability to make revenue in [the United] States at the moment."
Heartland Group rose 1 per cent to $2.11 and fintech Harmoney advanced 2.3 per cent to 91 cents after news that credit rules have been rejigged to try and ensure borrowers aren't unfairly penalised when applying for a loan.
"Earlier this year we heard stories about bank loans being declined because people had spent money on takeaways and streaming services – this was not the purpose of the CCCFA," minister of commerce and consumer affairs David Clark said.
Aged-care operator Oceania Healthcare rose 4.1 per cent to $1.01 after the Government outlined plans to boost the sector's workforce, although Green Cross Health fell 3.6 per cent to $1.36.
Tourism-focused Auckland Airport added 0.1 per cent to $7.49 while Air NZ slipped 0.8 per cent to 61.5 cents as the last border reopening phase began on August 1. More than 3,559 people applied for visas on the opening day, RNZ said.
Meanwhile, across the ditch the Reserve Bank of Australia lifted its cash rate target by 50 basis points to 1.85 per cent.
Dual-listed bank Westpac Banking Corp added 1.4 per cent to $24.30 while Australia & NZ Banking Group was unchanged at $25.30.
The NZ dollar was trading at 90.41 Australian cents from 90.16 just before the rate decision. The NZ dollar was trading at 62.92 US cents at 3pm in Wellington, down from 62.92 cents Monday.
The RBA's move will add to the view that the Reserve Bank of NZ is likely to hike rates by a further 50 basis points to 3 per cent at its meeting on August 17.
Wednesday's labour data will be key for investors as companies continue to struggle to find workers and are also grappling with increasing costs. BNZ economists forecast a 0.3 per cent increase in employment which, alongside a 70.9 per cent participation rate, delivers an unemployment rate of 3.0 per cent. They predict a 1.1 per cent increase in the private sector labour cost index taking the annual increase to 3.3 per cent, which will be the highest reading since September 2008.
Dairy companies, meanwhile, will be keeping a close eye on the overnight global dairy trade auction as milk prices weaken. Whole milk powder is expected to fall 2.9 per cent from the prior GDT auction while skim milk powder is tipped to ease 3.9 per cent, according to the SGX-NZX Dairy Derivatives market pricing.
Synlait Milk rose 2.5 per cent to $3.28, while Fonterra Shareholders' Fund units fell 0.7 per cent to $2.95. Eroad posted the biggest decline on the top 50, falling 3.3 per cent to $2.08.
NZ GDP falls 1% in September quarter; analysts expected 0.4% decline.