Geopolitical tensions keep NZ sharemarket steady, oil prices rise

The S&P/NZX 50 Index closed down 0.10% or 12.25 points, falling to 12,627.32, with 33.2 million shares changing hands to the value of $138.4m.

The S&P/NZX 20 index closed at 7,437.05, down 0.20%, while the S&P/NZX 10 index ended the day at 1,903.54, a fall of 0.29%.

There were 69 gainers and 64 decliners on the main board.

'A more dovish statement'
In the US, Federal Reserve chair Jerome Powell is expected to keep US rates steady, which will doubtless irk President Donald Trump.

Devon Funds Management’s Greg Smith said that a somewhat messy economic outlook has become even messier with the developing situation in the Middle East.

“Oil prices have rallied US$10 [NZ$16.58] to US$15, about 20%, so that is putting pressure on the inflationary outlook. Often, wars are a very temporary boost to inflation, but it’s just yet another layer of uncertainty with the trade situation unresolved,” Smith said.

“It’s hard to think that the Fed will do anything drastic, although I think arguably we could see a more dovish statement from Jerome Powell given the soft economic data of late. Obviously, he’s getting pressure from [Donald] Trump to cut rates, but it’s hard to see that happening at this meeting.”

Domestically, data out on Thursday is expected to show that NZ’s economy grew by 0.7% in the first quarter (Q1), but economists doubt that this can be replicated in the current quarter.

Smith said the figure is quite outdated and won’t include the impacts of Trump’s Liberation Day.

He believed that since then, the main source of relief from inflation has been a decline in energy prices, although this trend is now reversing.

Anxiety

On the NZX on Wednesday, Vulcan Steel recorded a lot of movement after it announced on Monday that its chief executive of 19 years, Rhys Jones, was stepping down from the role, with chief commercial officer Gavin Street taking over.

Shares in Vulcan Steel rose 1.81% to $6.20, up 11c, with 1,167,037 shares changing hands to the value of $7.1m.

Elsewhere, Briscoe Group saw its share price rise 23c to $6.23, with 221,384 shares changing hands to the value of $1.3m.

Meanwhile, shares in Fisher & Paykel Healthcare rose 0.55% to $36.85, up 20c with 643,610 shares changing hands to the value of $23.6m
Ryman Healthcare also rallied late in the day, with its share price rising 4.61% to $2.27, as 1,300,999 shares changed hands.

Wall Street stocks fell Tuesday after Trump hardened his rhetoric on the fighting between Iran and Israel, sparking worries of a broadening conflict.

The Dow Jones Industrial Average finished down 0.7% at 42,215.80.

The broad-based S&P 500 dropped 0.8% to 5982.72, while the tech-rich Nasdaq Composite Index shed 0.9% to 19,521.09.

Anxiety about Iran and Israel has emerged as the market’s focal point at a time when investors are also watching the Federal Reserve, which opened a two-day monetary policy meeting.

On Wednesday [Thursday NZ Time], the Fed is also due to release its latest economic projections on growth, unemployment and inflation.

Markets digested weaker-than-expected US economic data. Overall US retail sales fell in May by 0.9% from April to US$715.4 billion, figures that suggested a pullback from April’s surge in buying to beat out tariffs.

- Additional reporting by AFP.