FX.co ★ New Zealand Stocks Under Pressure After GDP Data

New Zealand shares fell 180 points, or 1.4%, to 13,135 in Thursday morning trade, snapping a two-session winning streak after fresh data showed GDP expanded just 0.2% qoq, undershooting forecasts of 0.4% and the central bank’s 0.5% estimate. Economists cautioned that the recent oil-price shock is likely to further weigh on domestic activity—given New Zealand’s status as a net oil importer—while adding to inflationary pressures.

Risk sentiment was also hit by a sharp sell-off on Wall Street on Wednesday, following Fed Chair Jerome Powell’s warning about the inflation risks posed by surging oil prices amid heightened tensions in the Middle East. At its March meeting, the Fed left interest rates unchanged and noted that inflation is easing more slowly than policymakers had hoped.

Losses were broad-based, with most sectors retreating, led by consumer durables, communications, and process industries. Notable laggards included Spark NZ (-5.3%), T&G Global (-4.5%), Summerset Group (-3.4%), and Meridian Energy (-3.2%). Traders are now looking ahead to China’s monthly setting of key lending rates, given China’s importance as New Zealand’s largest trading partner.