NZX 50 Poised for 2nd Straight Weekly Decline

The NZX 50 dropped 51 points, or 0.4%, to 13,641 in Friday morning trade, touching its lowest level since September 16 and reversing a slight gain in the previous session. The index tracked a decline on Wall Street overnight amid selling in tech stocks and rising oil prices. Rising oil prices continued to pressure sentiment, raising concerns about inflation and interest rate hikes. Traders were also cautious ahead of the release of New Zealand's food inflation and business PMI data next week, as well as US and Chinese inflation data that could provide further clues about economic conditions in the two countries. Financials, industrials, and consumer discretionary stocks mainly weighed on the index, with notable losses from Infratil (-2.2%), Ventia Services Group (-1.6%), Fletcher Building (-1.5%), South Port New Zealand (-1.2%), and Auckland International Airport (-1.1%). For the week, the index was heading for a 0.3% loss, which would mark its second consecutive weekly decline.

The NZX 50 climbed 8 points, or 0.1%, to close at 13,692 on Thursday, halting declines from the previous session and morning trade, mainly buoyed by gains in communication services, consumer staples, and utilities. However, declines in financials, tech, and consumer discretionary capped the gain. A downbeat session on Wall Street overnight due to higher Treasury yields also limited the rise. Caution rose after the FOMC minutes suggested the Fed is likely to raise rates again this year. Rising oil prices also limited the gain, as they raised concerns over inflation and interest rate hikes. Last month, the Reserve Bank of New Zealand raised its cash rate by 25 bps to 2.75%, delivering a second straight hike to bring inflation back to the 2% midpoint target. Among the top movers were Australian Foundation (1.5%), A2 Milk (1.4%), F&C Investment (1.4%), AFT Pharmaceuticals (1.3%), Contact Energy (1.3%), South Port NZ (1.2%), Henderson Far East Income (1.0%), and Fisher & Paykel (0.9%).

The NZX 50 dropped 28 points, or 0.2%, to 13,656 in Thursday morning trade, extending declines from the previous session and touching its lowest level since September 16, tracking a fall on Wall Street overnight due to higher Treasury yields. The decline was mainly weighed down by the materials, utilities, financials, and tech sectors; however, gains in real estate pared the fall. Caution rose after the FOMC minutes suggested the Fed is likely to raise rates again this year. Traders also kept a close eye on the Middle East conflict and its impact on oil prices amid inflation concerns. Last month, the Reserve Bank of New Zealand raised its cash rate by 25 bps to 2.75%, delivering a second straight hike to bring inflation back to the 2% midpoint target. Among early losers were Vulcan Steel (-1.1%), Westpac Banking Corp. (-0.8%), Sanford (-0.8%), Briscoe Group (-0.7%), Freightways Group (-0.6%), Infratil (-0.6%), Meridian Energy (-0.6%), and ANZ Group (-0.4%).