Market commentary

WELLINGTON: The New Zealand sharemarket became apprehensive on the realisation that interest rates will keep rising because the economy continues to expand.

The S&P/NZX 560 Index traded as high as 11,701.68 points but finished flat — up 0.89 points or 0.01% at 11,658.94. The index had an intraday low of 11,631.67 points.

There were 82 gainers and 57 decliners on the main board, with 32.17 million shares worth $109.01 million changing hands.

The secondquarter gross domestic product growth of 1.7% well and truly beat the median analysts’ prediction of a 0.4% increase and was just below the Reserve Bank’s forecast of 1.8%.

ANZ research said the ongoing wage and consumer price index inflation pressures meant the bank’s back was against the wall and it would keep hiking the official cash rate (OCR) no matter where activity landed, assuming no significant negative employment shock.

ASB lifted its forecast peak for the OCR from 4% to 4.25%.

Mark Lister, head of private wealth research with Craigs Investment Partners, said the economy was ticking over nicely. ‘‘It’s good for business, the sharemarket is holding its own and we are far away from a recession which some people were worried about.’’

The NZ dollar strengthened slightly to US60.08c against the American greenback after going under US60c for the first time in more than a decade — apart from the Covid19 blip. The NZ dollar had an intraday low of US59.98c.

Lister said the NZ dollar has weakened about 12% this year. ‘‘That’s a big fall. It’s good for the farming sector and exporters like Fisher and Paykel Healthcare.’’ —