The New Zealand stock market fell 25 points as surprisingly strong US employment data recalled the uncertainty surrounding interest rate hikes.
The benchmark S&P/NZX50 Index closed 0.2% or 25 points lower at 11,702, after only lose seven points on Friday.
Greg Main, a director at Jarden, said the New Zealand market trailed Wall Street lower after US government data showed US employers added an astonishing 528,000 jobs in June.
Strong labor data undermined expectations that a slowing US economy could prompt the Federal Reserve to delay or scale back plans for more interest rate hikes to cool inflation.
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“That US jobs report highlighted the pressure on the Fed and how quickly interest rates can fall, the market may have gotten a little ahead of itself,” Main said.
Following Friday’s announcement, traders expected the US Fed to raise its benchmark interest rate by 0.75 percentage points next month, up from half-point forecasts.
That would be three times the usual margin and the third such outsized increase this year.
Name Y. Huh/AP
US employers added 528,000 jobs in June, more than expected, raising fears of continued US interest rate hikes.
The New Zealand market, which rose 200 points in the first four days of last week, could pause this week before the company’s financial reporting kicks off next week.
“It’s just a little bit of waiting and digesting. There’s no catalyst to really go higher and if anything, it’s had a good recent run,” Main said.
Blue chips were mixed. Meridian Energy rose 0.9% to $5.20, Fisher & Paykel Healthcare rose 1.2% to $21.00, Auckland Airport fell 1.2% to $7.63, Spark lost 1.6% to $5 .14 and Mercury Energy fell 0.1% to $6.42.
Among the biggest risers were cinema software company Vista, up 4.8% to $1.05, Sky TV, up 1.6% to $2.43, Port of Tauranga, up 2.8% to $7.22 and Tourism Holdings, up 3.5% to $2.61.
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Air New Zealand was just after 62c Monthly Business Statistics June showed an improvement in the number of passengers carried, passenger revenue and capacity compared to June 2021, but a decrease compared to June 2019.
On the Tasman, Australia’s benchmark S&P/ASX200 Index fell 5 points to 7009 in late afternoon trading, while Asian stocks were mixed.
On Wall Street, the benchmark S&P 500 lost 0.2% to 4145.19. The blue chip Dow Jones Industrial Average added 0.2% to 32,803.47, while the tech-heavy Nasdaq composite lost 0.5% to 12,657.55.
The price of oil rose, with Brent oil, the price base for international trade, rising 1 cent to US$94.93 a barrel in London.
– With AP