New Zealand shares fell 28 points, or 0.2%, to close at 13,861 on Tuesday, mirroring overnight weakness on Wall Street. The decline came as rising oil prices, driven by uncertainty over the reopening of the Strait of Hormuz, heightened inflation worries and cast doubt on whether the Federal Reserve will cut interest rates this year. Investors were also focused on this week’s US inflation data for further guidance on the Fed’s policy stance ahead of its upcoming meeting.
The jump in oil prices likewise raised questions about the Reserve Bank of New Zealand’s policy outlook at its September meeting, particularly how renewed price pressures might influence its decision. Caution was further reinforced ahead of the RBNZ’s Q3 inflation expectations survey, due this week, after expectations picked up in Q2.
Sector-wise, energy, industrials, financials, and utilities were the main drags on the benchmark index. Notable decliners included Channel Infrastructure (-2.4%), Colonial Motor (-2.2%), Auckland International Airport (-1.6%), EBOS Group (-1.1%), Freightways Group (-1.1%), Infratil (-1.1%), Meridian Energy (-1.1%), ANZ Group (-0.6%), and A2 Milk (-0.6%).