NZX 50 falls over 1% on expectations of rate hike by RBNZ

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NZX 50 falls over 1% on expectations of rate hike by RBNZ

 NZX 50 falls over 1% on expectations of rate hike by RBNZ
Image source: Copyright © 2021 Kalkine Media Pty Ltd.

Highlights

  • The NZX 50 loses more than 1% intraday
  • Investors are expecting a rate hike in the upcoming MPC
  • Technology and consumer stocks were losers on Monday

The New Zealand share market inched lower on Monday as investors are expecting a rise in interest rates in the upcoming Monetary Policy Review (MPC) by the Reserve Bank of New Zealand (RBNZ). Higher rates usually dampen the business sentiment leading to investors avoiding riskier investments like stocks.

Investors are waiting and watching economic moves as there is a lot of economic data expected this week. While the big US banks kick off the first-quarter earnings season this week, central bank meetings in New Zealand and Canada are being watched closely by investors.

Source: © 2022 Kalkine Media®

The benchmark S&P/NZX 50 Index was down 1.1%, or 134.245 points, to 11,932.03 on Monday.

The top NZX gainers were agriculture stocks like Allied Farmers Limited (NZX:ALF), which gained almost 9% intraday, and Cannasouth Limited (NZX:CBD), which gained almost 8%. Even Air New Zealand (NZX:AIR), after seeing see-saw movements last week, gained over 5.63% on Monday.

The consumer discretionary and IT sectors were weak on Monday with Warehouse Group (NZX:WHS) falling 2.2% to NZ$3.05, Kathmandu Brands Limited (NZX:KMD) dropping 1.5% to NZ$1.36, and Hallenstein Glasson Holdings (NZX:HLG) declining by 3.1% to NZ$6.20. Amongst technology stocks, Serko Limited (NZX:SKO) fell 1.6% to NZ$5, Vista Group International (NZX:VGL) lost 1.1% to NZ$1.83.

Retirement village operator, Summerset Group (NZX:SUM), which reported its sales figures for Q1 today,  closed flat at NZ$11.70. Napier Port (NZX:NPH) closed 1.69% down at NZ$2.91, at the time of writing due to a downgraded earnings forecast. 

Global Markets

On Friday, the Dow Jones closed high. The Dow Jones Industrial Average surged 0.4% to 34,721.12, while the S&P 500 plunged 0.27% to 4,488.28. The NASDAQ Composite ended the session 1.34% lower at 13,711.00. Asian markets were also weak as on Monday as China’s inflation data weighed on market sentiment. Shanghai, Tokyo, Hong Kong and South Korea share markets all declined but the Australian S&P-ASX 200 advanced slightly to close at 0.1%.

Commodities:

Oil declined as China’s Omicron resurgence raised doubts about the demand from the world’s biggest importer of crude. The oil price slid below US$97 a barrel after gaining some lost ground on Friday. However, due to rising virus cases in Shanghai, the oil price was down on Monday.

Kiwi dollar

The NZD/USD pair was down 0.22% to 0.6829 on Monday as commodity prices showed signs of cooling off. The euro started the week on a strong note as French President and incumbent candidate, Emmanuel Macron, led in the first round of voting in the French presidential election. Moreover, investors in Canada, New Zealand and Europe investors also waited for the Central Bank’s policy decision of raising interest rates.

Cryptocurrencies

Bitcoin on Monday briefly dropped below its 50-day moving average to NZ$41,917. It was an over 2% fall, and the most popular crypto has been down more than 9% in 2022 (YTD).

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