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The New Zealand sharemarket posted its biggest gain for the week after a mighty 2% jump on Wall Street.

The benchmark S&P/NZX50 Index rose 1%, or 120 points, on Wednesday to 11,258.28, following a 0.1% decline on Tuesday .

Greg Smith, Devon Funds Management head of retail, said markets in the United States had pushed higher, with a rebound from recent lows appearing to be gaining some momentum.

“The New Zealand market’s been wearing the global sell-off, and we’ve seen some pretty high quality names sold off, so we’ve seen a bit of buying back in there.”

READ MORE: S&P/NZX50 Index inches down 0.1%, Ryman recovers some lost ground Dairy prices slip for a fifth global auction as Chinese demand weakens Serko sees ‘strong recovery’ in business travel after three years of losses

Overnight, US retail sales came in higher than expected, showing US consumers were in resilient shape, Smith said.

Also in the US, Federal Reserve chair Jerome Powell talked up inflation and the central bank’s plan to combat it, but also indicated that the Fed did not necessarily want to shock the economy with large rate increases.

In New Zealand, Fisher & Paykel Healthcare recovered ground lost on Tuesday, rising 1.3% to $21.05.

Among other blue chips, Auckland Airport was down 0.8% at $7.28, Mainfreight rose 2.2% to $74.10, Spark fell 0.8% to $4.78, and Infratil rose 1.3% to $7.90 ahead of its annual result on Thursday.

Ryman Healthcare was up 2.3% at $9.25, continuing to recover from a 7% slump on Monday ahead of its removal from a global index at the end of the month. The retirement village operator reports its annual result on Friday.

Shares in corporate travel technology company Serko fell 4.2% to $4.50 after it reported an annual loss of $36 million , its biggest since listing on the NZX in 2014. That followed a loss of $29m in 2021 and $9.4m in 2020.

The company said a recovery was starting to emerge, with a return in Australasian travel booking volumes to 78% of 2019 pre-Covid levels in March, and April bookings at 83% of 2019 numbers

Meridian Energy rose 4.7% to $4.65 after the power generator and retailer released a monthly operating update.

“Storage levels remained low, the weather has been quite dry, whereas demand’s been strong and that’s underpinned electricity prices so it’s a positive update,” Smith said.

Australia’s benchmark S&P/ASX200 Index was up 0.8% at 7174.3 in late afternoon trading, while markets were mixed across Asia.

Earlier on Wall Street, the benchmark S&P 500 index rose by an unusually wide daily margin of 2%, to 4088.85, after the positive US retail sales data helped to offset concern about inflation.

The blue chip Dow Jones Industrial Average rose 1.3% to 32,654.59, and the tech-heavy Nasdaq gained 2.8% to 11,984.52.

Big tech stocks led the rally. Apple and Microsoft were among the biggest winners.

Brent crude, the price basis for international oil trading, added 60 cents to US$112.53 per barrel in London. It lost US$2.31 the previous session to US$111.93.

– With AP

A 1.2% decline in market heavyweight Fisher & Paykel Healthcare kept New Zealand’s sharemarket in check on Tuesday.

The benchmark S&P/NZX50 Index closed down 0.1% at 11,137.88, following a small decline on Monday.

Grant Williamson​, director at Hamilton Hindin Greene, said Ryman Healthcare, which lost 7% on Monday ahead of its deletion from an MSCI global index, rebounded to close up 4.3%.

“Tracker funds that are invested in that index will have to exit Ryman before the end of May so that obviously created a fair amount of selling pressure,” Williamson said.

READ MORE: Budget 2022: Will there be a tax surprise? Will the Government’s carbon emissions work be undone by the ‘waterbed effect’? NZX 50 Index down 0.09%, Ryman loses 7% in aggressive selloff

“That stock could remain quite volatile as we go through the balance of this month.”

Shares in the retirement village operator have fallen from $15.50 at the start of the year to $9.04 on Tuesday.

“You have to be a certain size – even though New Zealand companies do get compensation, they don’t have to be as large as some of the other international companies, they still have to meet certain criteria to be in there and Ryman has missed out on that,” he said.

Australian investors had a part to play in Tuesday’s share price movements.

“A number of stocks that have large Australian investor shareholdings have come under a wee bit of pressure, which can quite often happen particularly as the New Zealand dollar slips somewhat,” he said.

The Australian influence was strongest in the stocks listed on both sides of the Tasman, and in New Zealand’s top-10 stocks.

“For example, Ebos and Fletcher Building both have large operations in Australia so do have quite a large Australian investor following.”

Fletcher Building closed down 2.6% at $5.85, having started the day at $6.01, while Ebos had a smaller decline of 0.3%, to $39.30.

Smaller stock Steel and Tube lost 5.5% to $1.37 despite Monday’s announcement it saw a strong improvement in margins and earnings for the 10 months to the end of April.

Fisher & Paykel Healthcare fell 1.2% to $20.78, Auckland Airport fell 0.9% to $7.34, and Air New Zealand lost 2.1% to 68c.

Stocks to gain included Contact Energy, up 1.8% to $7.55, Infratil, up 0.4% to $7.79, Manawa Energy, formerly Trustpower, up 0.2% to $7.05, and NZX, up 3.9% at $1.33.

Australia’s benchmark S&P/ASX200 Index was up 0.2% at 7113.6 in late afternoon trading.

Markets rose across Asia on signs of progress in China’s effort to bring outbreaks of coronavirus under control, which outweighed concern over weaker than expected Chinese economic data for April.

Earlier on Wall Street, the S&P 500 fell 0.4% to 4008.01, coming off a six-week losing streak.

The blue chip Dow Jones Industrial Average eked out a gain, rising 0.1% to 32,223.42, while the tech-heavy Nasdaq fell 1.2% to 11,662.79.

Technology stocks were among the biggest losers, with Apple falling 1.1%, along with retailers such as Amazon, down 2%, and Starbucks, down 4.2%.

On Tuesday, Brent crude, the pricing basis for international trading, lost 23 cents to US$114.01 per barrel.

– With AP

The New Zealand sharemarket avoided much of the red ink splashed across world markets following a 4% decline on Wall Street .

The benchmark S&P/NZX50 Index ended Thursday down 0.4%, or 51 points, at 11,206.93, following a 1% rise on Wednesday .

Greg Main, a director at Jarden, said not much too come out of Thursday’s Budget from a market point of view.

“There was the Budget, but the main focus is obviously what happened in the US. What really drove that market lower was the consumer cyclicals type segment, so you had results from Target spook the market.”

READ MORE: US stocks suffer steepest drop in almost 2 years S&P/NZX50 Index up 1% as NZ earnings season kicks off Budget 2022: The big winners and losers

US retail giant Target lost a quarter of its value after reporting earnings that fell far short of analysts’ forecasts.

The report came a day after Walmart said its profit took a hit from higher costs. The United States’ largest retailer fell 6.8%, adding to its losses from Tuesday.

“Inflation’s impact on the consumer, how much they have in discretionary spend after some of their fixed costs, is starting to be a bit of a concern,” Main said.

In New Zealand, top stock Fisher & Paykel Healthcare fell 2.1% to $20.59.

Main said consumer-focused stocks had tending to be negative during the session, while those that were slightly more defensive had held up relatively well.

Shares in infrastructure investor Infratil was up 2.5% at $8.10 after it posted a $1.23 billion annual profit, a result it says is its largest on record .

Main said the result was pretty much as expected, but its outlook commentary highlighted the fact it was in areas that had very strong structural growth, and were essentially hedged against inflation.

Infratil chief executive Jason Boyes said the sale of Tilt Renewables delivered a significant gain of more than $1b, but the year also included investment of more than $1.4b in renewable energy, digital infrastructure and healthcare.

Goodman Property rose 2.4% to $2.13 after releasing its annual result .

Defensive stocks to gain on Thursday included Auckland Airport, up 0.8% at $7.34, Oceania Healthcare, up 3% to $1.03, and Ebos, up 1% to $39.50.

On the other side, Serko notched up one of the worst losses with a 7.7% decline to $4.15. The market had digested the corporate travel technology company’s annual loss of $36 million on Wednesday and decided it did not like the look of it.

Across the Tasman, Australia’s benchmark S&P/ASX200 Index was sharply lower, down 1.5%, or 111 points, at 7071.5 in late afternoon trading.

Shares dropped sharply in Asia after the Wall Street’s broad retreat. Hong Kong’s Hang Seng led the declines, dropping 3.1%, while Tokyo’s Nikkei 225 index was 2.7% lower.

Earlier on Wall Street, dismal results from major retailer Target renewed worries over the impact of high inflation.

The S&P 500 had its biggest drop in nearly two years, shedding 4%, or 165.17 points to 3,923.68. The benchmark index is now down more than 18% from the record high at the beginning of the year, just shy of the 20% decline considered a bear market .

The blue chip Dow Jones Industrial Average sank more than 1100 points, or 3.6% to 31,490.07. The tech-heavy Nasdaq fell 4.7% to 11,418.15.

– With AP

An S&P Dow Jones Indices executive told Reuters on Wednesday it has removed electric carmaker Tesla Inc from the widely followed S&P 500 ESG Index because of issues including claims of racial discrimination and crashes linked to its autopilot vehicles, and Tesla CEO Elon Musk responded with harsh tweets including that “ESG is a scam.”

In it changes, effective May 2, the sustainability index also added soon-to-be-Musk-controlled Twitter Inc and oil refiner Phillips 66 while dropping Delta Air Lines and Chevron Corp, according to an announcement.

The back-and-forth over the index changes reflects a wider debate about the metrics used to judge corporate performance on environmental, social, and governance (ESG) issues, a growing area of investing.

Tesla has become the most valuable auto industry company by pioneering EVs and expanding into battery storage for electric grids and solar-power systems.

Factors contributing to its departure from the index included Tesla’s lack of published details related to its low carbon strategy or business conduct codes, said Margaret Dorn, S&P Dow Jones Indices’ head of ESG indices for North America, in an interview.

Even though Tesla’s products help cut planet-warming emissions, Dorn said, its other issues and lack of disclosures relative to industry peers should raise concerns for investors looking to judge the company across environmental, social, and governance (ESG) criteria.

“You can’t just take a company’s mission statement at face value, you have to look at their practices across all those key dimensions,” she said.

Tesla representatives did not immediately respond to questions. The company has previously called ESG methodologies “fundamentally flawed.”

Musk tweeted that “Exxon is rated top ten best in the world for the environment, social & governance (ESG) by S&P 500, while Tesla didn’t make the list! ESG is a scam. It has been weaponized by phony social justice warriors.”

Asked about the tweet, a representative for the index provider said Musk may have been referring to a list on a company blog post of the largest 10 constituents by market cap of the S&P 500 ESG Index after the removal of Tesla and others. The list is “not a ranking of best companies by ESG score,” the representative said.

Exxon is rated top ten best in world for environment, social & governance (ESG) by S&P 500, while Tesla didn’t make the list!

ESG is a scam. It has been weaponized by phony social justice warriors.

— Elon Musk (@elonmusk) May 18, 2022

Exxon now accounts for 1.443% of the weight of the index. Apple Inc was the largest at 9.657%.

GROWING CONCERNS

Investors concerned about issues like diversity and climate change have poured billions of dollars into funds using ESG criteria to pick stocks, prompting debate about how effectively the funds promote change or whether they push companies too much on issues that should be settled by government policy.

S&P Dow Jones Indices is majority-owned by S&P Global Inc. Musk and others have complained the firm and its rivals conflate too many issues by bundling ESG concerns into one total score.

For instance, a fund based on the S&P 500 ESG Index, the SPDR S&P 500 ESG ETF, received the low rating “D” by climate activist research group As You Sow, which noted despite its title and sustainability mandate, fossil fuel stocks make up 6.5% of fund assets.

In the company blog post reviewing changes from April 22, S&P’s Dorn said the index aims to keep industries weighted the same as they are in the regular S&P 500 index “while enhancing the overall sustainability profile of the index.” In practice, that means it can keep oil companies while leaving out big players like Facebook parent Meta Platforms and Wells Fargo & Co.

Dorn said Tesla’s ESG score had declined slightly from the “22” it received last year. At the same time, the average score among other automakers improved, pushing Tesla out of the ESG index because of a rule against including the lowest-quartile performers.

Dorn and others did not immediately describe other details such as the reasons Twitter or Phillips 66 were added or other companies dropped.

Among other big ESG rating agencies, MSCI Inc gives Tesla an “average” ESG rating, while the Sustainalytics unit of Morningstar Inc gives Tesla a “medium risk” rating, according to the firms’ websites.

On Wednesday a U.S. safety regulator opened a special crash investigation into a Tesla crash this month in California, among more than 30 crashes under investigation involving advanced driver assistance systems. [nL2N2XA2CY]

In February, a California state agency sued Tesla over allegations by Black workers that the company tolerated racial discrimination at an assembly plant, adding to claims made in several other lawsuits.

(Reporting by Ross Kerber; Editing by Pete Henderson, Aurora Ellis, and David Gregorio)