New Zealand shares were weaker on Thursday after the United States central bank caused fears that the US recovery might take longer than hoped.
In New Zealand, a 12.2 per cent plunge in June quarter gross domestic product (GDP) was the worst result since records began in 1987, but a fall of that magnitude, reflecting the coronavirus lockdown, had been expected.
The benchmark NZX-50 closed down 0.3 per cent, or 37.58 points, at 11,777.13, down from a session high of 11,873 and reversing the previous day’s 0.3 per cent gain.
“Definitely a softer day across our local market, and also all across the Australian and Asian markets,” said Chris Smith, general manager of CMC Markets NZ.
New Zealand shares were weaker on Thursday after disappointment from the US central bank.
“The US Fed signalled [US] rates were going to be on hold until 2023, which wasn’t unexpected by the market, but the markets are maybe taking a bit of a breather based on the fact the Fed in America isn’t seeing a recovery that fast potentially,” he said.
“It’s almost like we’ve seen a bit of pause today, but I think eventually markets will recover back onto their uptrend, as the alternatives for investments with interest rates at zero are too overwhelming for investors searching for yield and for return.”
Among blue chips, Auckland Airport was down 0.28 per cent at $7.11; A2 Milk fell 1.6 per cent to $17.88, retirement village operator Ryman Healthcare rose 2 per cent to $14, Mainfreight was up 0.5 per cent to $46.30, and Fletcher Building gained 2.9 per cent to $3.79.