NZ shares fall on US interest rate rises

New Zealand's main share index dipped on Wednesday, following Wall Street indices which fell sharply overnight as central bankers talked up the prospect of higher interest rates.

Wednesday, August 31st 2022, 6:00PM

by BusinessDesk

The S&P/NZX 50 Index fell 47.5 points, or 0.4%, to 11677.41. Turnover was $191 million, with the trading session extended for the August rebalance of the MSCI Equity Indices.

United States equities fell for a third consecutive session after Federal Reserve chair Jerome Powell’s speech at Jackson Hole last week.

His remarks at the central banking conference underlined his willingness to inflict pain on the US economy if that’s what was required to get inflation back to 2%.

Investors were given further reason to sell stocks today after new data showed the labour market was still holding strong.

BNZ strategist Jason Wong said good news for the US economy was bad news for interest rates and the equity market.

Oanda market analyst Edward Moya said stocks turned negative after confidence and job opening data supported the Federal Reserve’s aggressive stance.

“Over the next few months, if the labour market doesn't break and the consumer remains resilient, Wall Street might start pricing in rate hikes for February and March,” he said.

Skycity Entertainment led the local market lower – falling 2.4% to $2.85 – after having traded at an elevated level throughout August. The casino operator was up almost 6% in the past three months.

Fisher & Paykel Healthcare fell 2.2% to $19.66, not far off the 12-month low of $19 it hit in late May.

A2 Milk Company fell 2% today, giving back some of the more than 9% of gains it has won since reporting its earnings last week.

Travel software company Serko was unchanged at $3.60 after holding its annual general meeting today.

Chair Claudia Batten reaffirmed guidance given in May and said she expected revenue for the year ending March 2023 to be roughly double the prior year.

Tourism Holdings had the day’s biggest gain, up 4.6% at $2.72 on light volume, followed by Synlait Milk up 3.6% at $4.38.

The kiwi dollar was trading at 61.43 US cents at 5pm in Wellington, up 0.2% from yesterday. The trade-weighted index was at 70.75, from 70.86 yesterday.

Tags: Market Close