RICKY WILSON/Things
Investors are cautious about the outlook for the economy.
- The benchmark S&P/NZX 50 Index lost 0.3%
- ERoad jumped 13%
- Oil below $100 a barrel
The stock market weakened amid investor caution about the outlook for the economy in an environment of high inflation and rising interest rates.
The benchmark S&P/NZX 50 Index fell 0.3% or 28.91 points to 11,112.16 on Thursday. In the broader market, 77 stocks gained and 57 fell, trading $116 million worth of shares.
“People are fairly cautious because there is some uncertainty about what the economic environment will look like in the next 12 to 18 months,” said Hamilton Hindin Greene investment adviser Tom McBride. people have a better idea of how things are going to go.”
The potential for a recession was playing in the minds of investors, he said.
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“The more people talk about recession, the more cautious people become, so it kind of perpetuates itself,” he said.
Many investors “held in,” which lowered transaction volumes, and many smaller investors had exited the market, he said.
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Transportation fleet data company, ERoad, rose 13% to $2.08, bringing profits to 42% so far this week. The stock has fallen 67% in the past year, and the company’s chairman, Graham Stuart, recently bought 35,000 shares of the market for $52,657, bringing his stake to 105,000 shares.
“Potential investors see a little value there,” McBride said.
AFT Pharmaceuticals rose 8.5% to $3.85 after the pharmaceutical company said it signed a deal to sell over-the-counter drugs through its online platform Tmall in China.
AFT director Hartley Atkinson said it was an important growth opportunity for the company.
“China’s over-the-counter drug market is the second largest in the world after the US and is growing rapidly,” Atkinson said. “In 2020 it was worth $16.3 billion (NZ$26.4 billion) and is now projected to reach $22.7 billion in 2023 as the Chinese population ages and focuses more on health care.”
More than 58% of those sales took place online, he said.
Pushpay closed unchanged at $1.28 after the digital church payment service said it added the Archdiocese of Seattle, Washington, in the United States as a Catholic customer.
Pushpay counts more than half of the top 100 churches in the US among its clients, and targets Catholic parishes for growth.
The company said the addition of the Archdiocese of Seattle as a customer provided an opportunity to reach 174 parishes and a Catholic population of more than 600,000 people.
In the Asian markets, Shanghai, Tokyo and Sydney advanced, while Hong Kong fell. The oil price fell more than $1 a barrel to stay below $100.
Wall Street’s benchmark S&P 500 index gained 0.4% on Wednesday after the Federal Reserve said higher US interest rates may be needed to cool inflation. The comments were made in notes from the Fed’s last meeting. They recognized that this could weaken the economy.
The Fed last month raised its key interest rate three-quarters of a point to a range of 1.5% to 1.75%, the largest increase in nearly three decades. Chairman Jerome Powell suggested at the time that a rate hike of half or three-quarters of a point, three times the Fed’s usual margin, would be likely when policymakers meet at the end of this month.
The meeting notes confirmed that other officials agreed that such an increase would be “probably appropriate.”
Inflation has been fueled by Russia’s attack on Ukraine, which has pushed up the prices of oil and other commodities, and Chinese anti-virus controls that have shut down Shanghai and other industrial centers have disrupted supply chains.
Oil prices closed below $100 a barrel for the first time since early May in the US on Tuesday, but US crude is still up more than 30% this year.
– With AP