NZ market remains in ‘limbo’ ahead of Trump‘s second term
The New Zealand stock exchange remains in “limbo” as international markets brace for the incoming second term of US President Trump.
Thursday, January 9th 2025, 6:32PM
by BusinessDesk
The S&P/NZX 50 Index closed down 0.76% or 99.37 points to 12,944 with 21 million shares to the value of $74 million changing hands.
The S&P/NZX10 index also declined for another day, closing at 13,236, down by 1.0%. There were 56 gainers on the main board and 80 decliners.
Third Age Health Services reported the largest percentage increase, up 19c or 7.66% to $2.67, while Comvita was up by 5c or 6.41% to 83c.
General Capital reported the largest volume of trades, with 3,514,754 shares trading hands, as its price fell by 2.63% to 18.5c.
Devon Funds Management head of retail Greg Smith said that although it is currently quiet in terms of corporate reporting, next week should bring an uptick in market-driving announcements, “particularly with the US inflation and retail sales numbers due and the head of the Fed meeting at the end of the month”.
“There’s probably still a lot of interest in what the Fed’s going to do and whether they deliver on some of the promised rate cuts. It was insightful that in the Fed minutes, they mentioned the potential inflationary impact of Trump’s policies.”
Spark New Zealand rose 3c or 1.08% to $2.93, with 1,264,348 shares trading hands to the value of $3,694,127. Infratil also reported a slight growth of 0.42% to $12.03 with 542,288 shares traded to the value of $6,522,083.
US stock markets were rattled on Wednesday US time by worries about incoming US President Donald Trump slapping tariffs on imports, as well as the fading prospects for interest rate cuts.
A CNN report that Trump is considering declaring a national economic emergency to provide legal cover to impose tariffs on all imported goods sent US and European stocks into the red and the dollar higher against major rival currencies.
“Perhaps more than even during his last term of office, traders will need to pay close attention to everything coming from the new president,” said David Morrison, senior market analyst at Trade Nation.
“And, just to prove a point, the dollar has soared while risk assets have tumbled on reports that Trump is mulling a national emergency declaration to allow for a new tariff programme.”
US bond yields have also risen in recent days on the fading expectations of additional US interest rate cuts.
The focus now turns to Friday’s release of the key non-farm payrolls report, which will provide a fresh snapshot of the US economy.
The Nasdaq was down by 0.1%, closing at 19,478.88, while the S&P 500 rose by 0.16%, closing at 5,918.25.
Asian markets struggled Thursday after the tepid lead from Wall Street, as China had its core inflation rate rise slightly to 0.4%, up from 0.3% in November.
“I suppose it showed that stimulus support is starting to work in China a little bit, so that’s quite positive,” Smith said.
“China last year just sort of ambled along obviously as New Zealand’s biggest customer, it didn’t perk up as much as expected. It’s probably a bit of a wildcard as far as markets go this year, expectations are pretty low about what China’s going to do.”
In early trade, Hong Kong edged up while Shanghai fell as investors assessed data showing Chinese inflation eased in December, and officials face calls to ramp up stimulus to boost consumption.
Leaders have unveiled a range of measures to kickstart the world’s number two economy, with a focus on getting people to spend, and support for the troubled property sector.
“Given the various high-level meetings and policy communiques over the past month, it appears a safe bet to expect more aggressive fiscal policy support from China in 2025, as well as continued monetary policy easing,” said Lynn Song, chief economist for Greater China at ING.
— Additional reporting AFP
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