NZX closed about 0.89 percent lower today. Photo: Supplied / NZX
New Zealand shares have escaped lightly after worse than expected US inflation numbers triggered global market turbulence.
Wall Street’s markets fell 4 to 5 percent as the inflation numbers reinforced expectations of more aggressive interest rate hikes.
But the benchmark NZX-50 index has trimmed its losses and closed about 0.89 percent lower, compared to falls of 2.5 percent for Australia and major Asian markets.
Hobson Wealth investment advisor Ed Glennie said the local maket has rallied in recent weeks and has given back some of those gains, but has also factored in that New Zealand is ahead of the US in taming inflation.
In the US prices rose 8.3 percent in the 12 months through August, the Labor Department said, faster than the 8.1 percent that economists had expected.
That was down from 8.5 percent in July, driven by lower petrol costs.
But the costs of food, housing and medical care continued to surge, disappointing investors.
The Dow Jones Industrial Average sank nearly 4 percent, the S&P 500 dropped 4.3 percent, and the Nasdaq plunged more than 5 percent.
It marked the steepest day of declines since June 2020.
For US President Joe Biden, whose approval ratings fell below 40 percent earlier this year amid cost of living concerns, the report was also a troubling sign ahead of the national elections in November. They will determine whether Biden’s Democrats maintain their slim control of Congress.
Inflation in the US peaked at 9.1 percent in June, the fastest increase seen since the early 1980s.
In a statement on Tuesday, Biden focused on the improvement, saying: “Overall, prices have been essentially flat in our country these last two months: that is welcome news for American families, with more work still to do.”
Speaking to reporters en route to Delaware later in the day, the Democratic president said he was not concerned about the latest inflation report.
-RNZ / BBC
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The New Zealand share market has fallen sharply in early trading after worse than expected US inflation numbers reignited global market turbulence.
Stats NZ says food prices rose 1.1 percent in August on the month before, to be 8.3 percent higher than a year ago.
Market operator NZX says an improvement in its first half result demonstrates the strength of its earnings base, despite a 3.2 percent drop in the bottomline net profit.
The US Senate has passed a sweeping $430 billion bill intended to fight climate change, lower drug prices and raise some corporate taxes.
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