In the big picture, uncertainty continued to hang over the market due to the ever-shifting stance by the United States on world trade tariffs.

Over the weekend, US President Donald Trump declined to rule out the possibility of a recession in the world’s biggest economy, which also served to unsettle investor sentiment.

But the main local news of the day was Fonterra’s earnings upgrade for 2025 from 40 cents to 60c a share to 55c to 75 cents a share.

The upgraded forecast sits alongside a strong $10/kg milk price forecast for the current season, which ends on May 31.

The dairy co-op’s six-month result is due on March 20.

Its dividend policy is 60% to 80% of full-year earnings, with up to 50% of the full-year dividend to be paid for the interim period.

Fonterra also kicked off investor roadshow meetings for the possible sale of its consumer wing and associated businesses, with a view to a potential initial public offer.

The co-op’s units, which give investors access to its dividend flow, ended at $5.45, up 26c or 5.01%.

Fonterra’s farmer-only shares closed at $4.87, up 17c or 3.62%.

Elsewhere in dairy, Synlait Milk firmed 6c or 6.7% to 96c, and a2 Milk continued to build on a strong performance so far this year by gaining 10c or 1.13% to $8.97.

Devon Funds head of retail Greg Smith said there had been good news flowing from the dairy sector, with the farm gate milk price heading for a record $10/kg and with Fonterra’s upgrade.

“There are different drivers there, of course, but a2 Milk is enjoying strong demand in China, and Synlait is moving on from its restructure.“

Synlait — about 20% owned by a2 Milk — is a key supplier of infant formula to a2, its biggest customer.

Fisher & Paykel Healthcare, which has a big facility in Mexico — a key tariff target along with Canada and China — saw its share price rally by 53c or 1.5% to $35.03 after being weaker for most of the session.

“There is a lot of uncertainty, but you have to bear in mind that we have a lot of defensive names here,” Smith said.

“It [US trade policy] is evolving at a brisk pace, so there is a lot there for investors to try and make sense of.

“It seems as if the Trump administration is prepared to take short-term uncertainty in return for longer-term economic gain, but it would be highly disruptive if the tariffs were put in place in their current form.

“There is a lot of uncertainty in the market as to how it’s going to play out.”

Looking ahead, the retail sector is set to come into sharper focus this week.

Electronic card transaction data for February is due on Wednesday, as is Briscoe Group’s annual result.

Last month, Briscoe Group said sales for the 52 weeks to January 26 were just 0.06% below the record $792m reported for last year.

Briscoe shares ended 1c down at $4.55.

Smith said Briscoe Group was “a beacon of light in [a] pretty battered sector”.

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