New Zealand stock market slips 0.4% ahead of big central bank rate calls

The New Zealand stock market started the week on the back foot, losing 48 points at the closing bell on Monday.

The benchmark S&P/NZX50 index fell 0.4% to 11,531, after falling 0.7% on Friday. The index has gained ground so far this quarter, which started at 10,868, but is down so far this year, from 13,033.

CMC Markets analyst Tina Teng said the New Zealand market was under pressure due to a massive sell-off in risky assets ahead of rate decisions by four major central banks this week, including the US Federal Reserve. and the Bank of Japan. .

In New Zealand, the Reserve Bank is expected to have to act more aggressively to slow the economy, following the release of data on Thursday showing a 1.7% rise in gross domestic product on top of inflation at its highest level in 32 years. by 7.3%.

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The Reserve Bank releases its next rate decision on October 5, which is expected to be another 50 basis point hike in the official exchange rate to 3.50%.

“Macro headwinds, such as rising rates and slowing economic growth, have put pressure on stock markets generally,” Teng said.

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“However, a silver lining for New Zealand markets is that a pick-up in business confidence has supported companies with a positive outlook, generally in energy and travel-related stocks, such as Meridian Energy, Contact Energy, Air New Zealand and Auckland International. Airport.”

Meridian Energy was flat at $5.12, Contact Energy was also flat at $7.85, and Auckland Airport was up 0.6% at $7.66.

Fisher & Paykel Healthcare rose 0.2% to $19.50, Ebos rose 1.1% to $38.47 and Ryman gained 1.1% to $9.05.

Mercury Energy fell 0.5% to $6.00, Spark lost 1.3% to $5.03, Infratil fell 0.4% to $9.10, a2 Milk lost 1.4% to $6.15 and Air New Zealand fell 2.1% to 68 cents.

There were 86 declines and 57 rises among the 185 stocks traded. The turnover was estimated at only 72 million dollars.

Across the Tasman, the S&P/ASX200 index was virtually flat, down just 1.7 points to 6737 by late afternoon, as stocks fell across Asia.

On Wall Street on Friday, the benchmark S&P 500 fell 0.7% to 3873. It is now down 18.7% so far this year and down 4.8% for the week, much of the loss coming from a 4.3% rout on Tuesday after a surprisingly scorching US inflation report.

The blue-chip Dow Jones Industrial Average fell 0.5% to 30,822, and the tech-heavy Nasdaq fell 0.9% to 11,448.

FedEx tumbled 21.4% in its biggest single-day sell-off on record on Friday after warning investors that its fiscal first-quarter earnings are likely to come in lower than expected due to a drop in business.

The package delivery service is also closing storefronts and corporate offices and expects business conditions to weaken further.

Oil prices have risen. International benchmark Brent crude oil rose 72 cents to US$92.07 a barrel.

– With PA

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