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- NZX 50 Index up 0.01%
- Traders see aggressive Fed hikes
- Pushpay slumps 11%
The sharemarket was wobbly with no clear direction, as investors mulled the outlook for interest rates following higher than expected US inflation.
The benchmark S&P/NZX 50 Index inched up 0.01%, or 0.897 points, to 11,658.94 on Thursday, following a 0.9% drop on Wednesday. On the broader market, 82 stocks rose and 57 fell with $109 million shares traded.
Shares were mostly higher in Asia after a wobbly day of trading yielded modest gains on Wall Street. Traders are concerned that higher than expected US inflation data this week may prompt the Federal Reserve to raise interest rates more aggressively next week.
“The US market has been bouncing around this week, so that is flowing through to our stocks,” said Jarden director Greg Main. “We are just sort of bouncing along following those markets.”
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Trading was tentative in New York on Wednesday, a day after the market’s worst drop in two years, which was set off by fears that higher interest rates could cause a recession. The S&P 500 added 0.3%, while the Dow inched 0.1% higher, and the Nasdaq gained 0.7%.
Australia’s S&P/ASX 200 added 0.6% to 6869.60.
AP
Higher than expected US inflation has rattled Wall Street.
“The big news will be exactly what the Fed comes out and does next week with regard to interest rate rises,” Main said. “I think we will trade sideways until we get a bit more clarification on that.”
Markets were trying to gauge how aggressive the US central bank will move to control inflation, and how long interest rates will remain high once inflation starts coming down, he said.
Traders now see a one-in-four chance the Fed may hike its benchmark rate by a full percentage point next week, quadruple the usual move, according to CME Group. A day earlier, it was closer to a one-in-three chance. The site puts the probability of a three-quarter percentage point increase now at 76%, up from 69% on Tuesday.
The world’s biggest central bank has already raised its benchmark interest rate four times this year, with the last two increases by three-quarters of a percentage point.
There is little corporate news on the local market with most companies having reported their results.
Pushpay, the digital payment service for churches, was the biggest decliner on the market, down 11% to $1.10.
A report in The Australian said a potential buyout of the company by Australian private equity firm BGH Capital and US investment manager Sixth Street Partners might collapse because of financial market volatility.
Pushpay said in May that it had appointed Goldman Sachs to advise it on unsolicited approaches from third parties looking to acquire the company, but provided little further information.
The company told the NZX on Thursday that it was aware of media speculation in relation to its expressions of interest process and it remained in compliance with its continuous disclosure obligations.
Main said the process had dragged on for quite a while without a lot of communication with the market and people were reading between the lines about the likelihood of a future bid, noting that tech stocks had been in decline.
Air New Zealand rose 1.5% to 62 cents after announcing it planned to start flying its aircraft partly on sustainable aviation fuel made from recycled cooking oil and animal waste from next week.
Auckland International Airport advanced 1% to $7.675.
– With AP
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