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Synlait Plunges Nearly 19%, Weighing on NZX 50

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  Published in Science and Technology on Wednesday, February 4th 2026 at 1:11 GMT by The New Zealand Herald
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Auckland, New Zealand - February 4th, 2026 - The New Zealand stock market experienced a mixed session on Wednesday, with a significant downturn for Synlait Milk impacting overall sentiment despite positive results from Fisher & Paykel Healthcare. The NZX 50 index ultimately closed up marginally at 11,823.37, a result masking the sharp contrast in performance between key players. Synlait shares suffered a dramatic plunge of nearly 19%, closing at $5.51, following the announcement of a forecast loss between $90 million and $110 million for the fiscal year ending July 31st. Meanwhile, Fisher & Paykel Healthcare provided a boost, with its share price increasing to $29.93 following a dividend increase.

The Synlait decline underscores growing anxieties within the infant formula market and highlights the continuing fragility of global supply chains. CEO Grant Watson cited a combination of factors contributing to the anticipated loss, including a surplus of inventory held by customers, declining milk price expectations, and persistent, elevated shipping costs. This isn't simply a Synlait-specific issue; it represents a wider cooling in demand for infant formula, potentially linked to demographic shifts in key export markets - particularly China - and increased competition.

Analysts are expressing concern that Synlait's struggles may persist. Jarden's Ben Wallace described the loss forecast as "significantly below expectations," suggesting the market had not adequately priced in the extent of the company's difficulties. He further emphasized the uncertainty surrounding the timeline for a potential recovery. Craigs Investment Partners' Peter McIntyre echoed this sentiment, predicting continued volatility in Synlait's share price until clearer signs of stabilization emerge. The impact of this news extended beyond Synlait itself, potentially impacting investor confidence in the broader dairy processing sector in New Zealand.

Fisher & Paykel Healthcare's positive performance, driven by an increased quarterly dividend, provided a counterweight to the negative news. The company, a consistent performer on the NZX 50, demonstrates the resilience of certain segments of the New Zealand economy, particularly those focused on medical technology and export markets. However, even this positive news was somewhat tempered by the wider global economic context.

Beyond Synlait and F&P Healthcare, other market movements painted a mixed picture. Mercury and Mainfreight saw modest gains, while Skellerker and Steel & Tube both registered declines. Skellerker downgraded its annual earnings guidance, contributing to its 4-cent fall to $3.19, while Steel & Tube reported a loss, dropping 6 cents to $1.63. This diverse performance suggests a fragmented market, where company-specific factors are playing a significant role in determining stock performance.

Global Economic Headwinds

The New Zealand market's performance is also being influenced by global economic trends. Wall Street closed with mixed results on Tuesday, reflecting investor uncertainty surrounding future interest rate policy. The S&P 500 and Nasdaq edged higher, while the Dow Jones Industrial Average dipped. European markets also presented a mixed landscape. This global ambiguity is creating a cautious environment for investors, who are carefully assessing the risks and rewards of various asset classes. Fluctuations in commodity prices - with oil rising and gold falling - further contribute to the complexity.

Implications for New Zealand Economy

Synlait's forecast loss carries wider implications for the New Zealand economy. Dairy is a cornerstone of the nation's export revenue, and challenges within the infant formula sector, a high-value component of that export market, raise concerns about future economic growth. The supply chain issues cited by Synlait are also a broader concern, impacting numerous industries and contributing to inflationary pressures. The combination of lower dairy prices and increased shipping costs is squeezing margins for producers and exporters alike.

The resilience of companies like Fisher & Paykel Healthcare is encouraging, but a sustained economic recovery will require a broader stabilization of global conditions and a resolution of the supply chain disruptions. The current market volatility underscores the need for New Zealand businesses to adapt to a changing economic landscape and to diversify their export markets. Investors will be closely watching future earnings reports from key companies to gauge the health of the New Zealand economy and to assess the potential for further gains or losses.