New Zealand stocks hit near two-week low tracking global peers

New Zealand shares fell to a near two-week low on Monday following a broader sell-off in Asian markets, as hot U. S. jobs data last week stoked fears of a Federal Reserve interest rate hike and investors pulled out of AI-linked stocks. The benchmark S&P/NZX 50 index fell 0. 9% to 13, 038. 24 points in its worst session since May 20. The index had fallen as much as 1. 6% earlier in the session. Australian market was closed for a holiday. “Some very weak American markets on Friday have led somewhat of a sell-off in other Asian markets, ” said Grant Williamson, investment adviser at Hamilton Hindin Greene. Asian markets slumped, tracking heavy losses in tech stocks on Wall Street on Friday, driven by fears of overvaluation after a strong May jobs report fanned concerns of a Fed rate hike by when it meets next week. New Zealand’s central bank kept the official cash rate unchanged at 2. 25% at its May meeting, but signalled sooner and steeper rate hikes to counter inflation as energy costs rise due to the U. S. -Israeli conflict with Iran. “We certainly will see an interest rate rise when the Reserve Bank meets next, ” Williamson said, adding that the Reserve Bank of New Zealand will look past inflation somewhat if there is a solution in the Middle East. Swaps imply a nearly 75% chance of a hawkish move at the RBNZ’s next meeting on July 8, while there is an over 60% probability of a rate hike to 2. 75% in September. Losses were led by utilities and industrial stocks. Meridian Energy shed 2. 4% in its worst session in a month. Renewable electricity provider Mercury NZ lost 2. 3% in its biggest fall since May 20. Capping losses, A2 Milk and EBOS Group gained 3. 3% and 1. 9%, respectively.

Read full story on Business Recorder