NZX50 slides as Australian budget knocks banks

New Zealand’s S&P/NZX 50 index joined the ASX lower as the Australian federal government’s plans to make housing more affordable for young people rocked the big four banks, with dual-listed Westpac Banking Corp leading the local bourse lower and ASB Bank-parent Commonwealth Bank of Australia on track for its biggest ever one-day decline.

The kiwi dollar drifted lower and government bond yields crept up after the Reserve Bank’s quarterly survey of expectations showed longer-term inflation expectations remained well-anchored, giving the central bank some breathing space to gauge whether prices are creeping higher beyond the energy shock’s impact on fuel.

Prime Minister Christopher Luxon signalled more fiscal restraint in the upcoming budget, with a smaller operating allowance for new spending and a commitment to bring down debt as a proportion of the economy. 

Outside the benchmark index, Radius Residential Care gained after lifting its dividend, while fishing group Sanford extended its rally ahead of reporting tomorrow and ASX-listed local favourite Xero was on track to snap a five-day decline ahead of its annual result on Thursday.