NZX 50 sheds 0.92%, all eyes on Fed rate hikes

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NZX 50 sheds 0.92%, all eyes on Fed rate hikes

 NZX 50 sheds 0.92%, all eyes on Fed rate hikes
Image source: Gsign76, Shutterstock.com

Highlights:

  • The benchmark S&P/NZX50 index fell 0.92% to 11,675.92 after reporting a drop of 0.8% on the previous day.
  • Market sentiment remains subdued due to the energy crisis worldwide, bleak economic position of China due to lockdown and rate hike prospects by the Fed.
  • Oil and gold prices were down in Tuesday’s session.

New Zealand sharemarket ended lower on Tuesday, with the benchmark S&P/NZX50 index falling 0.92% to 11,675.92 after reporting a drop of 0.8% on the previous day. Investors remained worried about shaky global growth outlook and recession, or stagflation concerns due to high oil prices amid the Russia-Ukraine war and policy tightening prospects by central banks.

The US Fed is due to announce its monetary policy on Wednesday and it is likely to raise interest rates by 0.5 percentage points for the very first time since 2000.

Within NZX 50 sub-indices, S&P/NZX All Energy and S&P/NZX All Industrials witnessed the biggest drop of 3.88% and 1.14%, respectively. Top stock Fisher & Paykel Healthcare (NZX:FPH) was down 0.7% to NZ$21.2, Auckland International Airport (NZX:AIA) fell 1.79% to NZ$7.66, Mainfreight (NZX:MFT) lost 1.78% to NZ$79.8, and Ryman Healthcare (NZX:RYM) reported a drop of 1.43% to NZ$8.93.

Source: © 2022 Kalkine Media®

ikeGPS Group (NZX:IKE) was the top gainer of the day, up 16% at NZ$0.87, while Move Logistics Group (NZX:MOV) reported a drop of 7.8% to NZ$1.3 at the end of the trading session on Tuesday.

Market sentiment remains subdued due to the energy crisis worldwide amid the Russia-Ukraine war, bleak economic position of China due to lockdown and rate hike prospects by the Fed.

Global stocks higher

US stocks ended higher on Monday due to dip buying in the technology sector. US Treasuries witnessed a drop on Monday, with the benchmark 10-year yield hitting 3% for the first time in over 3 years.

The S&P 500 rose 0.6% to 4155.38, Nasdaq Composite Index gained 1.6% to 33,061.5 and the Dow rose 0.3% to 33,061.5 in Monday’s trading session.

South Korea’s KOSPI was up 0.21%, at the time of writing, while Hong Kong’s Hang Seng Index was up 0.11%.

Oil and gold prices down

Oil prices reported a drop on Tuesday. The EU planned to impose tighter sanctions on Russia this week, and Germany affirmed to put an official ban on Russian oil.

At the time of writing, Brent crude futures were down 0.24% to US$107.31 per barrel, while US WTI crude futures were down 0.25% to US$104.91 per barrel.

Gold prices dropped over 2% on Monday due to increased US Treasury yield and dollar, propelled by prospects of faster rate hikes by the Fed.

At the time of writing, spot gold was down 0.24% to US$1,858.64 per ounce, while US gold futures stood at US$1858.1, down 0.30%.

Crypto market cap remains low

The global crypto market cap stood at US$1.74 trillion, down 0.69% over the last day. Polkadot, Dogecoin, Shiba Inu and Avalanche were down between 14 and 19% in the previous 24 hours.

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