The New Zealand sharemarket was positive for most of Wednesday before turning negative late in the session, although Fletcher Building continued to show strength.
The benchmark S&P/NZX50 Index fell 0.2% to close at 10,678 following Tuesday’s 1% gain.
Peter McIntyre, investment adviser at Craigs Investment Partners, said US futures were weaker, and the New Zealand market had also weakened as the day continued.
“Our direction is really driven by what happens offshore and what happens in the Aussie market. They got weaker this afternoon, and we followed suit as well.”
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Investors were anticipating what would be in the testimony of US Federal Reserve chair Jerome Powell to US lawmakers on Thursday, NZ time.
The market was spooked by rising expectations of another 75 basis point rate hike in July, followed by a 50-point rise in September, McIntyre said. Last week, the Fed hiked its key short-term interest rate by triple the usual amount.
On the NZX, Fletcher Building jumped 4.9% to $5.08, adding to Tuesday’s 3.6% gain.
The company also affirmed guidance of annual earnings of around $750 million before interest and tax (ebit), excluding significant items. Its second-half ebit margin, before significant items, was expected to be around 9.5%.
“Fletcher Building was the standout stock, in regards to that ebit guidance and margin in particular, being a lot stronger,” McIntyre said.
Among other stocks to jump, Skellerup was up 5.4% at $4.84, Rakon rose 4% to $1.28, DGL was up 3.9% at $1.28, Hallenstein Glasson rose 2.9% to $5.30, and Serko was up 2.7% at $3.74.
In the red were Eroad, down 5.3% at $1.58, My Food Bag, down 3.5% to 82c, Contact Energy, off 3.3% at $7.00, and Air New Zealand, down 2.7% at 54c.
The sector with the biggest decline was healthcare, with Fisher & Paykel Healthcare down 0.9% at $19.20, and Ryman Healthcare falling 2% to $8.80.
Among other blue chips, Meridian Energy was flat at $4.37, Auckland Airport was up 0.4% at $7.30, and Spark rose 1% to $4.75.
Australia’s benchmark S&P/ASX200 Index was down 0.1% at 6514.3 in late afternoon trading. Across Asia, shares were mostly lower as markets shrugged off a Wall Street rally.
On Wall Street, the benchmark S&P 500 rose 2.4% to 3,764.79, recouping about 40% of its losses last week. The blue chip Dow Jones Industrial Average rose 2.1% to 30,530.25 and the tech-heavy Nasdaq climbed 2.5% to 11,069.30.
Stocks have been mostly sliding in recent weeks as investors adjust to higher interest rates that the Federal Reserve and other central banks are increasingly doling out to temper record-high inflation. Investors worried that the Fed risked slowing economic growth too much and bringing on a recession.
– With AP