New Zealand’s S&P/NZX 50 index joined most Asian stock markets lower, as upcoming US inflation data and elevated oil prices keep investors nervous that the Federal Reserve will hike its benchmark interest rate next week.

Meanwhile, the kiwi dollar hit a new 13-year low against the Aussie after Reserve Bank of Australia assistant governor Sarah Hunter said the central bank was increasingly worried about the pace of price rises, and that another interest rate hike could be in the works.

The NZX 50’s decline was broad, with power companies and blue-chip stocks such as Fisher & Paykel Healthcare, Mainfreight and Infratil among those weighing on the benchmark.

Meanwhile, KMD Brands hit a two-month high on an adjusted basis after welcoming Australian surfwear firm Ghanda Clothing’s owner to its share register.

Still worried

The NZX50 fell 149.93 points, or 1.1%, to 13,792.9, with 38 stocks declining, eight gaining and four unchanged. The S&P/NZX 20 index futures contract for September decreased 0.6% to 7,670, with 800 lots traded for a value of $6.1 million, while the NZX 20 dropped 1.1% to 7,668.15.

Turnover across the main board was $134.2 million, of which F&P Healthcare accounted for almost $13 million as it slid 1.4% to $43.70.

Stock markets across Asia were broadly weaker ahead of US inflation data, which Fed governor Christopher Waller singled out as a key input to his view on whether a rate hike at next week’s meeting would be warranted. Singapore’s Straits Times Index fell 0.6% and Japan’s Nikkei 225 slipped 0.1%, while South Korea’s Kospi was among the few gainers, rising 1.5% in late trading.

Australia’s S&P/ASX 200 index dropped 0.9% after RBA assistant governor Hunter said the central bank was concerned about the pace of inflation across the Tasman, with the recent spike in oil prices adding to the pressure. The kiwi dropped as low as 81.09 Australian cents, trading at 81.18 cents at 5pm in Auckland from 81.54 cents yesterday.

Heavyweight companies were the main drags for the NZX 50, with Auckland International Airport declining 0.9% to $8.51, Mainfreight slipping 2.3% to $65.98, Infratil sliding 1.1% to $14.59 and Meridian Energy falling 1.1% to $5.32.

“It’s not the usual leaders driving things and that’s why we’re down – the big boys haven’t been shining too much today,” said Peter McIntyre, an investment adviser at Craigs Investment Partners. “We’ve got US inflation data coming out this week and markets will look to take a bit of direction from that.”

Vulcan Steel posted the steepest decline on the day, down 6.8% at $6.45 after chair Rhys Jones disclosed a sale of 120,000 shares for $834,000, or $6.95 each, leaving him with about 4.5 million shares.

Local tech companies were broadly weaker, with Gentrack falling 5.1% to $4.31 and Serko sliding 4.9% to $1.54, while Vista Group International decreased 0.7% to $2.70.

Spark New Zealand was the most heavily traded stock on the day with a volume of 4.9 million shares changing hands as the telco fell 0.9% to $2.15.

Strategic review

KMD posted the biggest gain on the day, up 9.5% at $1.91, after Australian retailer Josh Rudd – who founded the surfwear firm Ghanda Clothing – emerged as a substantial shareholder of the outdoor equipment and surfing chain, with a 6.2% holding.

Briscoe Group, which owns 2.7% of KMD, slipped 0.2% to $4.44.

Tower gained 1.8% to $1.965. German reinsurers were weaker overnight as they face lower prices from primary insurers renegotiating their policies at the industry’s major annual conference.

Among companies going ex-dividend, Argosy Property fell 1.9%, or 2 cents, to $1.02 as it shed rights to a 1.6625 cents per share dividend, Vector declined 2.9%, or 14 cents, to $4.78 as it went ex-div on a 13.5 cents per share payment, and Channel Infrastructure dropped 3.4%, or 12 cents, to $3.46 as it shed rights to a 7.25 cents per share payment.

On the debt market, Bank of New Zealand’s offer of up to $100 million of five-year notes attracted orders and soft indications of more than $800 million, and the bank said it expected to issue at least $750 million, with the bookbuild setting an indicative margin of 0.68%.

The kiwi dollar traded at 58.59 US cents at 5pm from 58.75 cents yesterday after Statistics New Zealand figures showed sales growth and improved profits among selected industries in the June quarter. Mining, metal production manufacturing and furniture manufacturing reported the strongest earnings growth.

Reporting by Paul McBeth.