NZ stocks drop 1.2% after Wall Street plunge

Markets have been volatile in the aftermath of yesterday's announcement of US tariff increases. Photo / NZME

New Zealand shares opened weaker after Wall Street put on its biggest decline since the depths of the Covid-19 crisis in 2020, wiping US$2.5 trillion ($4.3t) off its total value.

By late morning, the S&P/NZX50 Index had dropped by 151 points or 1.2% to 12,187.17. Volume was light.

United States President Donald Trump’s tariff offensive threw global markets into a spin on Thursday with the S&P 500 and Nasdaq Composite dropping by 4.8% and 6%, respectively.

The US dollar was also weaker, which helped the NZ dollar firm to around US58c.

Yesterday, the S&P/NZX 50 Index fell as much as 1.3% early in the day but recovered to close at 12,338.57, up 0.15%, due largely to a rebound in the market’s biggest stock, Fisher and Paykel Healthcare.

Salt Funds managing director Matt Goodson said more volatility could be in store as the day progresses, given the moves in major markets overnight.

In a filing to the NZX, F&P Healthcare detailed the likely impact on the company and noted the 10% tariff on products made in New Zealand.

In early March the US enacted a 25% tariff on products imported from Mexico that are not compliant with the US-Mexico-Canada Agreement (USMCA), it said.

Almost all F&P Healthcare products imported into the US from Mexico are currently compliant with the USMCA, it said.

F&P Healthcare currently makes about 45% of its volume in Mexico and 55% in New Zealand, and for the first half of the 2025 financial year about 43% of the company’s revenue came from the US.

The company said about 60% of its US volumes are supplied from Mexico and approximately 40% are supplied from New Zealand.

F&P Healthcare’s manufacturing facilities in both Mexico and New Zealand have spare capacity to increase volumes if required.

The company’s financial year ended on March 31.

It expects costs to rise in response to tariffs in 2026.

Investment firm Jarden said the outcome for F&P Healthcare, which makes respiratory products, was better than expected.

“We upgrade our rating to neutral, acknowledging the better-than-expected likely US tariff risk and materially shallower near-term earnings per share revisions than might have been,” the firm said.

Several other stocks detailed their exposure to tariff increases.

In a breakdown, Jarden said specialised manufacturer Skellerup looked to be the most exposed, given its manufacturing base in high tariff regions.

Skellerup has reiterated its 2025 earnings guidance for net profit of $52m -56m.

Jarden also pointed out that North America is winemaker Delegat Group’s primary market, making up 52% of revenue and being a key source of growth.

New Zealand is the third largest wine exporter to the US at about 8% of imports, with the other exporters being European countries subject to greater tariffs.

“While New Zealand is relatively better positioned, the decline in wine consumption trends may lend itself to a larger demand response from consumers,” Jarden said.

At 21% of group revenue, KMD Brands is the only listed NZ retailer with any meaningful direct exposure to the US.

Jarden estimated the tariff impact will equate to about 17% of the company’s US revenue.

“However, most global retailers will be in the same position with 70% of footwear and apparel imports coming from high tariff countries.”

Other companies likely to feel the impact of higher tariffs included manuka honey exporter Comvita, apple exporter Scales, and software firm Eroad, Jarden said.

Jamie Gray is an Auckland-based journalist, covering the financial markets, the primary sector and energy. He joined the Herald in 2011.